- September 1, 2010: Vol. 2, Number 8

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China’s 2Q/2010 Growth: Are the Numbers a Cause for Celebration or a Warning Signal?

by Alex Eidlin

Because summer is usually a slow time of the year with many investors and managers taking vacations, I wanted to make sure you have not missed important news, while soaking up the sun and enjoying margaritas on the beach.

One important recent news story was the announcement of China’s second quarter GDP growth by the Chinese National Bureau of Statistics.

The world’s third largest economy grew by 10.3 percent annualized in the second quarter as compared with the same period a year earlier. The percentage was lower than first quarter 2010’s growth of 11.9 percent.

Several questions came to mind right away. Should we take this second quarter figure as an indication that the Chinese government skillfully slowed down what is perceived to be overheated growth, or is this a sign of more serious weakness coming our way?

Following this announcement, the International Monetary Fund (IMF) lifted China’s GDP growth forecast for all of 2010 to 10.5 percent fr

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