Global downturn won't hit China badly

Global downturn won't hit China badly: "'We expect the Chinese economy to grow by 10 percent this year despite a US-led global economic slowdown,' said Liang Hong, an economist with Goldman Sachs in Hong Kong. 'Strong domestic demand, especially investment growth, is expected to sustain the overall GDP growth, though the export growth is set to slow down.'"

Mei Xinyu, a researcher in China's Ministry of Commerce thinks that the weakening dollar will make American technology cheaper for Chinese companies, while it won't reduce China's exports by much. The thinking seems to be: Americans will continue to shop at Walmart, while Saks 5th Avenue's suppliers may fare worse.

Given China's propensity for selling knock-off merchandise, I worry about increasing technology exports to China. Toxic dog food and lead-painted toys are the big headlines, but the economic damage comes from pricier products. From sneakers to golf clubs to re-branded computer processors and counterfeit cars, the Chinese imitations are the most expensive form of flattery. Billions - with a "B" - of dollars, as much as $50 Billion a year, worldwide. Software piracy is so rampant, Microsoft won't even take a piracy report unless the counterfeit is particularly good, with full edge-to-edge hologram.

It's hard to get a guage on the Chinese economy. "'China's policy in international affairs has been to 'hide its capacities and bide its time’,' Mei says, pointing to China’s growing assertiveness in the World Trade Organization and its push for more voting power in the International Monetary Fund. " Indeed, everything from GDP to per capita income is subject to revision for a host of reasons, from data becoming more refined over time, to changes in purchasing power parity formulas. Full and honest disclosure doesn't seem to be one of the Chinese government's virtues.