High chance that China may become the world's largest economy in less than a decade?

[touchring]

This year, Greater China became the 3rd largest Mercedes Benz market, from 6th last year.

So, it is not just the cheapo cars that is driving China's car sales in quantity pass the USA.

http://www.marketwatch.com/story/mer...k=MW_news_stmp

With dependency on the US market declining, there is less incentive for China to buy US treasury, leading to a rise in interest rates, causing the US market to shrink while China expands further. Not to mention that a change in exchange rate can easily blow up the Chinese economy by 30-40% in dollar terms.

[GRG55]

Re: High chance that China may become the world's largest economy in less than a decade?

This year, Greater China became the 3rd largest Mercedes Benz market, from 6th last year.

So, it is not just the cheapo cars that is driving China's car sales in quantity pass the USA.

http://www.marketwatch.com/story/mer...k=MW_news_stmp

With dependency on the US market declining, there is less incentive for China to buy US treasury, leading to a rise in interest rates, causing the US market to shrink while China expands further. Not to mention that a change in exchange rate can easily blow up the Chinese economy by 30-40% in dollar terms.

It's not quite that simple. If US long rates rise, and the Fed maintains its low official policy rates "indefinitely", then that means the yield curve will steepen further, which in turn leads to much greater risk free profits for the US banking system. Further, under your scenario of accelerating Chinese growth, the US banking system, which now thrives on speculation instead of credit support for the productive economy, will undoubtedly borrow more ZIRP free money to jump on board and play, and further contribute to creating, the next commodity bubble.

The US financial system has now become such a large part of the US economy that what I describe above will certainly assist in supporting US reported GDP.

[GRG55]

Re: High chance that China may become the world's largest economy in less than a decade?

This year, Greater China became the 3rd largest Mercedes Benz market, from 6th last year.

So, it is not just the cheapo cars that is driving China's car sales in quantity pass the USA.

http://www.marketwatch.com/story/mer...k=MW_news_stmp

With dependency on the US market declining, there is less incentive for China to buy US treasury, leading to a rise in interest rates, causing the US market to shrink while China expands further. Not to mention that a change in exchange rate can easily blow up the Chinese economy by 30-40% in dollar terms.

If what you say is correct then we can look forward to that elusive "self sustaining" global recovery. China will have replaced its dependence on the USA and miraculously transformed itself into an internal consumer driven "Mercedes-buying" powerhouse, and the US banking system [see my previous post] will have confirmed that after a brief pause in 2008 FIRE is back...with a vengeance.

Although that is exactly what it looks like at this moment, you'll forgive my scepticism about what we think we see, I hope...

[Rajiv]

Re: High chance that China may become the world's largest economy in less than a decade?

China's Gini coefficient is already approaching the US at 47 (which is at the highest point ever, surpassing 1929 when it is estimated that it was 45) -- So according to you, it appears to be heading to above 50 -- then it starts rivalling the income inequalities of the Latin American countries. I think the situation you are describing is not a good thing.

Remember that trickle down does not work, and increasing wealth inequlity leads to discontent when it becomes highly visible -- in China it is far more visible than it is in the US.

[Anon21456]

Re: High chance that China may become the world's largest economy in less than a decade?

Remember that trickle down does not work, and increasing wealth inequlity leads to discontent when it becomes highly visible.

Is discontent a bad thing when you can afford to live in gated communities ? "They" don't seem to think so...

[touchring]

Re: High chance that China may become the world's largest economy in less than a decade?

It's not quite that simple. If US long rates rise, and the Fed maintains its low official policy rates "indefinitely", then that means the yield curve will steepen further, which in turn leads to much greater risk free profits for the US banking system. Further, under your scenario of accelerating Chinese growth, the US banking system, which now thrives on speculation instead of credit support for the productive economy, will undoubtedly borrow more ZIRP free money to jump on board and play, and further contribute to creating, the next commodity bubble.

The US financial system has now become such a large part of the US economy that what I describe above will certainly assist in supporting US reported GDP.

I see what you mean, fire will boost GDP. Yes, but so far, the US is still suffering from deflation.

The last 1 year or so has shown that China can become a consumer driven economy. China is now many things at the same time, the consumer, the factory, and the financier. Isn't this what they offer for high speed rail projects? This is the advantage of having 600 million urban dwellers that can buy the mercedes benz and iphones, and 800 million rural folks from which you derive the sweat shop labor.

This combination is definitely better than one which only consumes.

[chr5648]

Re: High chance that China may become the world's largest economy in less than a decade?

I'd much sooner bet they become a democracy or some sort of pseudo democracy than the worlds biggest economy.

[touchring]

Re: High chance that China may become the world's largest economy in less than a decade?

I'd much sooner bet they become a democracy or some sort of pseudo democracy than the worlds biggest economy.

It is not difficult to become pseudo democracy, Singapore is one perfect example, but i doubt China will even bother to put on a show, and why bother? They wouldn't care and don't need to. The Chinese are very proud of their existing system, if you read the posts on the net.

[c1ue]

Re: High chance that China may become the world's largest economy in less than a decade?

There is ZERO chance China will become the world's largest GDP in ten years - in any currency you care to name.

China GDP today: $4.33T
US GDP today: $14.6T

The delta between China's growth and the US' growth must be 12.92% or greater for the next 10 years in order for this to happen.

Since this didn't happen in the PAST 10 years, it is extremely unlikely it will happen in the NEXT 10 years.

China's real growth rate barely even reached 12% ONCE in the past 10 years:

http://www.indexmundi.com/g/g.aspx?v=66&c=ch&l=en

So barring hyperinflation in China - not impossible if the Symbols' theory pans out - China isn't going to be the largest economy in any respect in 10 years.

[Chomsky]

Re: High chance that China may become the world's largest economy in less than a decade?

Report: China To Overtake U.S. As World's Biggest Asshole By 2020

April 19, 2010 | ISSUE 46•16


Chinese president and rising international dipshit Hu Jintao.



WASHINGTON—According to a new report released Monday by a panel of top economists and social scientists, the People's Republic of China will overtake the United States as the world's dominant asshole by the year 2020.

The findings, published in the most recent issue of Foreign Affairs, support recent speculation that America's unquestioned reign as the leading super-prick may soon be drawing to a close, leaving China as the foremost shithead among all developed nations.

"We are seeing a changing of the asshole guard," said Andrew Freireich, noted economist and lead author of the article. "Although the U.S. will remain among the world's two or three biggest cocks through much of this century, we can now confidently project that China, with its soaring economic growth, ever-expanding cultural influence, and total disregard for basic human rights, will overtake America as King Prick Numero Uno within the next 10 years."

Added Freireich, "It's the dawning of a new huge bastard era."

According to the report, China has slowly emerged as a massive fucker over the past half century, a period of egotistical growth unseen since America's booming douche years following World War II.

Enlarge Image

According to estimates, China already has a slight lead on the U.S. in not giving a fuck about climate change.
Over that same time, China has seen a dramatic rise in both its GDP and Shithead Index, definite signs that the Asian nation is developing into a cocksucker of global proportions.

"When you consider China's wanton pollution, rising militarism, and rampant overdevelopment, it's clear they'll soon be thoroughly out-dicking the U.S. in every measurable area," international affairs specialist Neil Farren said. "Not many Americans want to admit it, but as the yuan continues to get stronger, and millions upon millions are exploited as a result, more and more people worldwide will be looking to China, not America, and saying, 'Man, can you believe what an unbelievable sack of shit that country is?'"

China's ascension to supreme asshole status is occurring at a much faster pace than experts originally predicted. In fact, many now believe that by as early as 2015 Chinese citizens will arrogantly strut across the globe disrespecting other cultures and shouting loudly while dressed in XXL "Speak Chinese or Go Home" T-shirts.

Prominent scholars claim that America's gradual fall from the upper echelon of international supershits is merely part of an inevitable pattern seen time and again throughout world history.

"All of the great asshole nations eventually watch their day in the sun slip away," historian Richard Merriam told reporters. "Don't forget that Great Britain was the world's dominant asshole for well over three centuries, and look at it now: a pussy-whipped shell of the insufferable, bullying jackass it used to be."

Others have posited that China's ascension may be part of a larger reorganization of the global asshole hegemony that could see the United States losing even more ground in the century to come.

"A country like Iran is obviously a pretty big dick, but ultimately it lacks the resources to be a truly world-class asshole," Farran said. "Same goes for Pakistan. But the list of abominable shit-heel countries competing for global prick dominance is a long one, and the U.S. is just going to have to get used to seeing countries like Russia and India mentioned in the same breath as itself."

"Many Americans are going to be upset over the prospect of falling from that top spot, but that's the reality we face," Farrar continued. "Hopefully, the United States will find a way to grow and adjust to its evolving role on the world stage without acting like a complete and utter fuckhead about it."


http://www.theonion.com/articles/rep...st-assh,17277/

[D-Mack]

Re: High chance that China may become the world's largest economy in less than a decade?

It is not difficult to become pseudo democracy, Singapore is one perfect example, but i doubt China will even bother to put on a show, and why bother? They wouldn't care and don't need to. The Chinese are very proud of their existing system, if you read the posts on the net.

Germany is pretty good at censoring , but why is google not telling us anything about China ?

China
Chinese officials consider censorship demands as state secrets, so we cannot disclose that information at this time.

Germany
458 data requests
188 removal requests
94.1% of removal requests fully or partially complied with.
7 Blogger (court order)
3 Blogger
4 Google Suggest (court order)
2 Google Video
1 Image Search (court order)
94 Web Search (court order)
4 Web Search
3 YouTube (court order)
70 YouTube


United States
3580 data requests
123 removal requests
80.5% of removal requests fully or partially complied with.
2 AdWords (court order)
1 AdWords
1 Apps (court order)
6 Blogger (court order)
6 Blogger
1 Book Search
1 Geo (except Street View)
1 Gmail (court order)
1 Google Video (court order)
4 Groups (court order)
1 Groups
1 orkut
22 Web Search (court order)
5 Web Search
7 YouTube (court order)
63 YouTube

http://www.google.com/governmentrequests/

[touchring]

Re: High chance that China may become the world's largest economy in less than a decade?

There is ZERO chance China will become the world's largest GDP in ten years - in any currency you care to name.

China GDP today: $4.33T
US GDP today: $14.6T

The delta between China's growth and the US' growth must be 12.92% or greater for the next 10 years in order for this to happen.

Since this didn't happen in the PAST 10 years, it is extremely unlikely it will happen in the NEXT 10 years.

China's real growth rate barely even reached 12% ONCE in the past 10 years:

http://www.indexmundi.com/g/g.aspx?v=66&c=ch&l=en

So barring hyperinflation in China - not impossible if the Symbols' theory pans out - China isn't going to be the largest economy in any respect in 10 years.

Have you considered currency changes? I pluck the figure of 10 years as a thought provoking number, it could well be 15 years, would it matter? 10 or 15 years passes in a flash, I'm sure most of you would agree.

The present real economy of China is already almost as large as the US if not larger if you consider the amount of natural resources China imports, and China is already the world's largest market for toothpaste, bathing foam, cellphones, personal computers, and many other consumer products, so the GDP figure in whatever currency is only symbolic.

Another thing is I doubt that validity of China's population at 1.3 billion, I think the reality maybe closer to 1.5. This would make the population base of China 5 times as large as the USA. So, the average Chinese person only needs to reach 1/5 the living standard of an average American for China's economy to be as large as the US.

Anyone here been to China? Tell me whether that is possible or if it has already happened?

[c1ue]

Re: High chance that China may become the world's largest economy in less than a decade?

Have you considered currency changes? I pluck the figure of 10 years as a thought provoking number, it could well be 15 years, would it matter? 10 or 15 years passes in a flash, I'm sure most of you would agree.

Currency changes are irrelevant in the long term because they equalize over time. Any hyperinflation or inflation in any given nation gets compensated for by its trade partners over time.

The present real economy of China is already almost as large as the US if not larger if you consider the amount of natural resources China imports, and China is already the world's largest market for toothpaste, bathing foam, cellphones, personal computers, and many other consumer products, so the GDP figure in whatever currency is only symbolic.

Absorbing huge amounts of natural resources due to massive exports is not a 'real' economy - as most of these resources depart China after processing. For one thing, as China decreases exports as its own labor costs rise, this inflow will drop. The 'net' China resource consumption is thus actually quite low in many areas.

By your own definition China has hit its peak size of 'real' economy: each incremental increase in GDP accompanied by a decrease in resource inflow.

Another thing is I doubt that validity of China's population at 1.3 billion, I think the reality maybe closer to 1.5. This would make the population base of China 5 times as large as the USA. So, the average Chinese person only needs to reach 1/5 the living standard of an average American for China's economy to be as large as the US.

Even were China to achieve the same GDP as the US, the relative wealth of the nation would be considerably lower. The analogy is comparing a 2 income, DINK couple with $200,000 income vs. a 4 income, extended family of 10 with the same $200,000 income.

Are these two the same in economic capability? I think not.

[touchring]

Re: High chance that China may become the world's largest economy in less than a decade?

Even were China to achieve the same GDP as the US, the relative wealth of the nation would be considerably lower. The analogy is comparing a 2 income, DINK couple with $200,000 income vs. a 4 income, extended family of 10 with the same $200,000 income.

Are these two the same in economic capability? I think not.

By the time China's GDP reaches the US, China will have a greater economic capability by virtue of it being manufacturing oriented whereas the US is predominantly a service based economy, ceteris paribus.

10 years is only a number, it could be 15 years, or 20 years, I think at this point, it is not clear how long it will take.

[c1ue]

Re: High chance that China may become the world's largest economy in less than a decade?

By the time China's GDP reaches the US, China will have a greater economic capability by virtue of it being manufacturing oriented whereas the US is predominantly a service based economy, ceteris paribus.

10 years is only a number, it could be 15 years, or 20 years, I think at this point, it is not clear how long it will take.

Not a single one of the other Asian economies has EVER been able to successfully transition away from the mercantile model.

And not even Japan with its 127 million people (and counting down) was able to grow without essentially offshoring jobs and manufacturing away from larger nations (the US).

So again, explain to me how China - 5 times larger than the US - is going to be able to make the transition.