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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

China, India digging out of recession hole faster than U.S., West

Here's a piece I wrote in today's Post about fourth-quarter GDP news that came out of China and India this week and why they're waaay ahead of GDP in the United States and rest of the West:

Beijing said Thursday that China's fourth-quarter gross domestic product (GDP) shot up a breathtaking 10.7 percent, well surpassing expectations and marking its fastest quarter of growth since 2007.

In India on Thursday, government officials said that fourth-quarter GDP is expected to decline slightly from the previous quarter but that even with the pullback, the nation's GDP will expand by at least 6 percent, which is more than twice what is expected in the United States.

The United States will be lucky to get 2.5 percent GDP growth this year. What's up with Asia?

With China, two things:

A) That nation is in a residential housing boom like we saw in the United States last decade. The government is trying to put the brakes on the boom to make sure it doesn't go bust, but we'll see if it can.

B) In business, the term "black box" is used to describe a business that makes profits in a way that analysts and investors don't understand. Enron was a black box: The company kept reporting outstanding earnings, pushing the stock price higher and higher, but no one knew exactly how Enron was doing it. Turned out, the company was cheating. With China, remember this: It's an authoritarian government, which means no checks and balances exist on what the government says and dissent is punished. This is why I call China a Red Box, because I never entirely trust the figures that come out of Beijing.

With India, a few things:

A) Manufacturing shot up 20 percent in the second half of 2009 in India, boosting GDP.

B) The reelection of free-market PM Manmohan Singh and the electoral purging of communists from the congress last year means the country made a serious re-commitment to capitalism. Expect more growth to follow.

C) India's growth demographics are superb, unlike Europe's: 30 percent of Indians are 15 years old or younger.

Follow me on Twitter at @theticker

By Frank Ahrens  |  January 22, 2010; 11:27 AM ET
Categories:  The Ticker  | Tags: China, GDP, India  
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