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It seems that the rational for guessing that China will hit a recession is a regression type analysis. You look back at the GDP trend and guess that it will continue its course. The problem is graphs do not control GDP, industries do. Just because China and the world has seen huge economic damage, it does not mean that it will continue.|
To determine if China will hit a recession we need to look at the root of the problems. In an oversimplified sentence, world consumer spending has dropped because credit is frozen. Business can't expand, not being able to expand has cut consumption, a lack of consumption has cut manufacturing orders. Not until the root of the liquidity problem is addressed will the world economy turn around.
The US has done a lot to fix some of its problems backing commercial paper, re-capitalizing banks, and soon to be large fiscal spending. These things will help restore the US economy and, as the biggest player in the world economy, help restore the world economy.
But China is doing a lot to restore its own economy. Since China is a production oriented economy, as opposed to service oriented, it is easy to help the Chinese economy by doing exactly what the Chinese government is doing, spending a crap-load of cash on capital developments. It is estimated that the stimulus package proposed by China will result in 3% of China's GDP, Amazing.
So, if we add the three percent to the current 5.8 percent growth, then we have a growth rate that is inline with the past ten years.
Is this GDP growth sustainable, no. No county in the world can grow this fast forever. It will however, last a long time. I am guessing the growth rate will slowly decelerate as China takes its position as the largest economy in the world.
One last, semi-unrelated point. A recession is two quarters of negative GDP growth. For China to have a negative GDP growth, something drastic would need to happen.