China: Rural Income Grew Higher than GDP

In an interview with Class-CNBC, Italian economist Michele Geraci, teacher of Finance at the New York University in Shanghai, commented on the fact that China GDP grew “only” 4.9% in Q3. Along with that “weak” growth, there is one important piece of data—that incomes of the rural population grew 11.5%. Chinese GDP can be considered like a lake, Geraci said, which divides itself into two rivers: one river is industrial profits, and the other river is household income. The Chinese system can manage to divert flows from the lake to either of the two rivers. In this case, corporations are more flexible and can “suffer” a bit more, while for Beijing it is important that the population not suffer. https://www.youtube.com/watch?v=OfWI8cKrgUE