What is more, China is experiencing a continuous drop in exports during the prolonged Asian financial crisis, which has trapped the Asian tigers, debilitated Japan, knocked Russia down, and rippled across the Pacific all the way to Latin America. Over the past year, some foreign economists have expressed the pessimistic view that China would be the next to go under, and its currency would be devalued sooner or later. Even the most optimistic foreign observers reckon that a 6.5 percent growth rate would be the best possible. But Chinese experts remain confident that China can attain 8 percent growth this year. Their reasoning is well-founded.
Every dark cloud has a silver lining.
The floods had a major impact upon agriculture, but are expected to boost growth in industry and the tertiary sectors. The anticipated new wave of construction will deplete stockpiles and boost domestic demand for investment and retail sales, which will be vital in view of China's oversupply of consumer goods and the slump in the export market. The combined GDP of the seven coastal regions accounts for 48 percent of China's total, compared with 16.5 percent of the five provinces flooded. Post-flood rebuilding could generate an enormous demand for new investments. The national unity, emerging in the face of the disaster, has proven to be a powerful glue upon which much consensus can be built.