China Economy Closes On U.s. And Japan

[Carrera]

China has recently overtaken the U.K. economy and is now slowly closing to overtake Germany and then it's set to surpass the U.S. and Japan. Experts believe within a few short years China will be the world's biggest economic superpower. Note:
"China's economic juggernaut maintained its breakneck momentum last year with a 9.9% growth surge that almost certainly took it past Britain to become the world's fourth-biggest economy."
Not only that but China (with its free education system) is now producing 300,000 graduates every year in science, technology, engineering and mathematics - three times the number coming through UK universities.
Even more astonishing are China's plans to lead in the space race and send manned missions to Mars in the not too distant future.
On June 22, 2006, Long Lehao, deputy chief architect of the lunar probe project, laid out a schedule for China's lunar exploration.
Sun Laiyan, administrator of the China National Space Administration, said on July 20, 2006, that China would start deep space exploration focusing on Mars over the next five years, during the 11th Five-Year (2006-2010) Program period.

 

[Carrera]

China is now expected to overtake the US within two decades (maybe less). Beijing reported that the country’s national income is a significantly higher than previously reported.
The upgrade to the present scale of China’s economy came after a radical overhaul of its official figures. On the new data, it was shown how China would eclipse Italy and overtake France and Britain this year. It has now overtaken both Italy and the U.K. as predicted.
The Guardian writes:
"A communist party is presiding over arguably the most remarkable economic transformation in human history. It is true, of course, that the Chinese party is a very different creature to its European counterparts, not least in its ability, since 1978, to undertake the most extraordinary regeneration. This paradox presents us with one of the great enigmas of the early 21st century."

 

[sogood]

China is now expected to overtake the US within two decades (maybe less). Beijing reported that the country’s national income is a significantly higher than previously reported.
The upgrade to the present scale of China’s economy came after a radical overhaul of its official figures. On the new data, it was shown how China would eclipse Italy and overtake France and Britain this year. It has now overtaken both Italy and the U.K. as predicted.
The Guardian writes:
"A communist party is presiding over arguably the most remarkable economic transformation in human history. It is true, of course, that the Chinese party is a very different creature to its European counterparts, not least in its ability, since 1978, to undertake the most extraordinary regeneration. This paradox presents us with one of the great enigmas of the early 21st century."

Spending only a tiny fraction of the US on military items makes it easy to accumulate wealth.

 

[limerickman]

Yep, the Chinese have rekindled the entrepreneurial spirit that was always there in their nation.
The earliest recorded traders "modern" traders were the Chinese.
When Europe was in the Dark Ages, China had huge volumes of trade in and out of their country.
They're a shrewd race.

To compound the problem of China's economic growth vis-a-vis other trading blocks and in particular the USA, China has pegged the Yuan to the Dollar and has refused for years to revalue it.
Consequently the biggest foreign holder of US dollars is ----------China.
Given that the US balance of trade deficit and balance of payments deficit is massive, with China accounting for a substantial part of both issues, China hold the whip hand.

The latest delegation from the US goverment contained none other than the Fed Chairman Bernanke, begging the Chinese to open their economy up to US product (that is to sell US-based manufacturing product, in to China).
As ever the Chinese reply was couched in ambiguous terms.

 

[sogood]

Yep, the Chinese have rekindled the entrepreneurial spirit that was always there in their nation.
The earliest recorded traders "modern" traders were the Chinese.
When Europe was in the Dark Ages, China had huge volumes of trade in and out of their country.
They're a shrewd race.

To compound the problem of China's economic growth vis-a-vis other trading blocks and in particular the USA, China has pegged the Yuan to the Dollar and has refused for years to revalue it.
Consequently the biggest foreign holder of US dollars is ----------China.
Given that the US balance of trade deficit and balance of payments deficit is massive, with China accounting for a substantial part of both issues, China hold the whip hand.

The latest delegation from the US goverment contained none other than the Fed Chairman Bernanke, begging the Chinese to open their economy up to US product (that is to sell US-based manufacturing product, in to China).
As ever the Chinese reply was couched in ambiguous terms.

Why bother to play with the US nicely when the Bush admin/neocons continue to drum up this China Threat theory? Nor is it surprising Iran, N Korea, Syria etc are all playing hard ball with the US given what a hard time the US gave them over the last few years. Now the US just have to kowtow to them if they want their help in the Iraq quagmire and other issues.

And then for a friendly country like Australia, we supported the US govt on so many ridiculous policies internationally in the last few years, and now the US still wants to give our wheat farmers a hard time through the AWB issue. Makes one wonder if being an enemy is a better way to extract concessions out of the US.

 

[Carrera]

China poses only one "threat" to the U.S.A. - the threat of being the main global powerhouse, which isn't really a threat. China needs the U.S. as a large market to trade with so neither China nor the U.S. would profit from war. The U.S. also needs China's help to try and denuclearise North Korea and China isn't too keen on Japan going nuclear.
Nope, I suppose China and the U.S. will have to continue to co-operate. However, the future for China is looking good. It also goes to show what State planning can do since we now see China churning out all these thousands of highly employable science graduates thanks to State promotion of education.
Contrast this with Blair's inability to promote free education in sciences and his reliance on foreign expertise. Contrast it with China buying out British car industries and re-selling Chinese copies and you can see where my point lies.
They appear to be doing everything right and must soon overtake Germany shortly.

Why bother to play with the US nicely when the Bush admin/neocons continue to drum up this China Threat theory? Nor is it surprising Iran, N Korea, Syria etc are all playing hard ball with the US given what a hard time the US gave them over the last few years. Now the US just have to kowtow to them if they want their help in the Iraq quagmire and other issues.

And then for a friendly country like Australia, we supported the US govt on so many ridiculous policies internationally in the last few years, and now the US still wants to give our wheat farmers a hard time through the AWB issue. Makes one wonder if being an enemy is a better way to extract concessions out of the US.

 

[limerickman]

Why bother to play with the US nicely when the Bush admin/neocons continue to drum up this China Threat theory? Nor is it surprising Iran, N Korea, Syria etc are all playing hard ball with the US given what a hard time the US gave them over the last few years. Now the US just have to kowtow to them if they want their help in the Iraq quagmire and other issues.

And then for a friendly country like Australia, we supported the US govt on so many ridiculous policies internationally in the last few years, and now the US still wants to give our wheat farmers a hard time through the AWB issue. Makes one wonder if being an enemy is a better way to extract concessions out of the US.

Food for thought, sg.

I think that what we're seeing - economically at least - is a shift.
Globalisation and the ramifications from it, suggest that there is a shift away
at present from the traditional "strong" economies, to the "emerging economies".
Unlike previous shifts though, such as Japan's explosive growth in the 1970/80's and the more recent explosion in the Asian economies, both explosions imploded - I don't think that this will be the case with China.
China's market is so vast it doesn't seem to be as exposed as the Asian Tiger
or the Japanese Tiger.

 

[sogood]

China poses only one "threat" to the U.S.A. - the threat of being the main global powerhouse, which isn't really a threat. China needs the U.S. as a large market to trade with so neither China nor the U.S. would profit from war. The U.S. also needs China's help to try and denuclearise North Korea and China isn't too keen on Japan going nuclear.
Nope, I suppose China and the U.S. will have to continue to co-operate. However, the future for China is looking good. It also goes to show what State planning can do since we now see China churning out all these thousands of highly employable science graduates thanks to State promotion of education.
Contrast this with Blair's inability to promote free education in sciences and his reliance on foreign expertise. Contrast it with China buying out British car industries and re-selling Chinese copies and you can see where my point lies.
They appear to be doing everything right and must soon overtake Germany shortly.

I agree. It's funny how the table has turned b/n the US and China. China is now the pragmatist in business, politics and all things while US is being chained to some old ideological fixation that has severely limited its flexibility on many domestic and international issues. But yes, there's definitely a win-win situation in the making if both sides are sensible about it.

 

[limerickman]

China poses only one "threat" to the U.S.A. - the threat of being the main global powerhouse, which isn't really a threat. China needs the U.S. as a large market to trade with so neither China nor the U.S. would profit from war. The U.S. also needs China's help to try and denuclearise North Korea and China isn't too keen on Japan going nuclear.
Nope, I suppose China and the U.S. will have to continue to co-operate. However, the future for China is looking good. It also goes to show what State planning can do since we now see China churning out all these thousands of highly employable science graduates thanks to State promotion of education.
Contrast this with Blair's inability to promote free education in sciences and his reliance on foreign expertise. Contrast it with China buying out British car industries and re-selling Chinese copies and you can see where my point lies.
They appear to be doing everything right and must soon overtake Germany shortly.

The reality is that China will be an economic powerhouse - we're agreed.
I also think that India too will become a powerhouse as well.

Where we disagree is the fate of the US economy.
I think that we're witnessing a gradual decline in the US economy which will remain with us for the forseeable future.
The fact is that globalisation entails that Europe and the USA's economic influence and performance will decline from their respective peaks.
With more competitive economies in the market (ie China, India), the traditional powers who influenced and control those markets weakens.
I don't think that it will be terminal for either Europe or America : but the diminnution in influence/power in economic terms has already started.

 

[Carrera]

India is actually ahead of China in the I.T. field. India has a very good education system and is also churning out far more science graduates than we are. Many people think India will outstrip China, although I still think it's China that will be the major global power, although we'll see how things develop.
I agree the U.S. won't collapse as such and its decline will be gradual. There is even a possibility the U.S. could halt its process of decline if a strong, competent leader emerges to change the current direction and focus on what America has always been good at doing - global economics. After all, the Romans looked as if they were finished at the time of Commodus (see the film Gladiator for his role) but there was a strong recovery when wiser rulers changed direction (such as Hadrian, Trajan e.t.c.)
Maybe Hilary Clinton may find a way to work with emerging superpowers such as India and China, although time is running out and fast. America can't continue to spend and spend on these dud wars while China continues to invest enormous resources in industry and marketing. China is looking very stable of late and the growth astounds visitors to Bejing.

The reality is that China will be an economic powerhouse - we're agreed.
I also think that India too will become a powerhouse as well.

Where we disagree is the fate of the US economy.
I think that we're witnessing a gradual decline in the US economy which will remain with us for the forseeable future.
The fact is that globalisation entails that Europe and the USA's economic influence and performance will decline from their respective peaks.
With more competitive economies in the market (ie China, India), the traditional powers who influenced and control those markets weakens.
I don't think that it will be terminal for either Europe or America : but the diminnution in influence/power in economic terms has already started.

 

[limerickman]

India is actually ahead of China in the I.T. field. India has a very good education system and is also churning out far more science graduates than we are. Many people think India will outstrip China, although I still think it's China that will be the major global power, although we'll see how things develop.
I agree the U.S. won't collapse as such and its decline will be gradual. There is even a possibility the U.S. could halt its process of decline if a strong, competent leader emerges to change the current direction and focus on what America has always been good at doing - global economics. After all, the Romans looked as if they were finished at the time of Commodus (see the film Gladiator for his role) but there was a strong recovery when wiser rulers changed direction (such as Hadrian, Trajan e.t.c.)
Maybe Hilary Clinton may find a way to work with emerging superpowers such as India and China, although time is running out and fast. America can't continue to spend and spend on these dud wars while China continues to invest enormous resources in industry and marketing. China is looking very stable of late and the growth astounds visitors to Bejing.

I've been reading some economc papers about China - and one fact that was really interesting, concerns population and demographics.
The highest ever mass movement of population in history took place between 2000-2005, with migration of chinese people from rural areas to urban settings.
In the past 5 years, 17 cities have sprung up in China with populations of more than 10 million people.

 

[sogood]

I agree the U.S. won't collapse as such and its decline will be gradual. There is even a possibility the U.S. could halt its process of decline if a strong, competent leader emerges to change the current direction and focus on what America has always been good at doing - global economics. After all, the Romans looked as if they were finished at the time of Commodus (see the film Gladiator for his role) but there was a strong recovery when wiser rulers changed direction (such as Hadrian, Trajan e.t.c.)
Maybe Hilary Clinton may find a way to work with emerging superpowers such as India and China, although time is running out and fast. America can't continue to spend and spend on these dud wars while China continues to invest enormous resources in industry and marketing. China is looking very stable of late and the growth astounds visitors to Bejing.

It would be a terrible for everyone if the US starts to run down, worse if the leaders then starts to implement desperate measures (economic as well as military) to maintain its global dominance. I too hope a wiser leader can emerge out of the 2008 presidential election. But you are right, if the US doesn't quickly correct itself, not only will it lose out economically and politically, but it'll also continue to lose the respect of the common people internationally.

Dud war, how right! Reflecting back on the Bush II presidency (domestic fiscal policy, war on terror, global warming/Kyoto, Alaska oil drilling, Missile defence, Iraq War, Afghanistan War, disaster relief post Katrina, nuclearization of N Korea, back flip and assistance sought from axis of evil countries), is there anything he actually chose wisely? Is there anything he actually completed to satisfaction? What a screwed up 7 years

 

[Carrera]

My theory is the West is so internally divided and lacking a practical system of leadership, there is little doubt China will emerge as the only global superpower within 20 years.
Seeing as I lived in the USSR during the Gorbachev period for a time (and in the Yeltsin era) I can see exactly the same kind of political/social fragmentation in the west as happened in the USSR. Just my opinion, of course.
What you also see is no concept of national interest or any specific definition of what comprises a national interest.
Only recently, it emerged the U.K. has been employing an Iranian translator within Afghanistan (one of many specialists who hail from Russia, China, the Middle east e.t.c.). As you would expect, this specialist has forwarded a good deal of sensitive information to Iran, so Iran now has a lot of information at its disposal.
We see this happening time and time again. For instance, a few short years ago, China was likewise able to plant Chinese informants within the U.S. intelligence circles in order that China could download the U.S.'s classified nuclear data. As I suspect (and many others do) this was why the U.S. bombed the Chinese Embassy in Belgrade but it was too late to prevent China leapfrogging ahead.
Need I mention the U.S. almost handing over port control to the Saudis and this was only just prevented from happening by near hysteria in New York?
Let me put it another way: China isn't employing either Russians, Americans, Europeans or whoever in its highest intelligence circles, so what's secret in China stays secret. China doesn't have to rely on science graduates and specialists from overseas as its producing millions of its own scientists via a free education system. There are milllions of educated Chinese who can fill vacancies and businesses within and without China.
China doesn't put men with a law degree in charge of running an economy but it has think-tanks and economists who tend to think further ahead.
I do believe the Bush and Blair system is like a huge ship with a hole. Water is seeping in but the ship's allowed time is in the process of delay before enough water gets into the hull and brings it down. That's what happened to the USSR. They tried to reform the political system first while China has opted to reform the economy first and then loosen up the political reform process.
I think history will show the U.K. decline from maybe the eighties and onwards while the date of U.S. decline will date from the exit of the Clintons and onwards - unless the U.S. totally reforms its current outlook to reinvent itself.

It would be a terrible for everyone if the US starts to run down, worse if the leaders then starts to implement desperate measures (economic as well as military) to maintain its global dominance. I too hope a wiser leader can emerge out of the 2008 presidential election. But you are right, if the US doesn't quickly correct itself, not only will it lose out economically and politically, but it'll also continue to lose the respect of the common people internationally.

Dud war, how right! Reflecting back on the Bush II presidency (domestic fiscal policy, war on terror, global warming/Kyoto, Alaska oil drilling, Missile defence, Iraq War, Afghanistan War, disaster relief post Katrina, nuclearization of N Korea, back flip and assistance sought from axis of evil countries), is there anything he actually chose wisely? Is there anything he actually completed to satisfaction? What a screwed up 7 years

 

[Carrera]

I wouldn't say the U.S. is all bad. It has many successes such as space technology, global markets, film industry, I.T., music and arts and lots of stuff.
What the U.S. isn't so good at is this interventionism in other countries it fails to fully understand and without a more detailed plan as to how events might unfold.
As for global warming, the truth is nobody really knew about this till recently. Back in the seventies nobody realised we were screwing up the environment. Probably Russia was even more reckless than the U.S. for pollution.

It would be a terrible for everyone if the US starts to run down, worse if the leaders then starts to implement desperate measures (economic as well as military) to maintain its global dominance. I too hope a wiser leader can emerge out of the 2008 presidential election. But you are right, if the US doesn't quickly correct itself, not only will it lose out economically and politically, but it'll also continue to lose the respect of the common people internationally.

Dud war, how right! Reflecting back on the Bush II presidency (domestic fiscal policy, war on terror, global warming/Kyoto, Alaska oil drilling, Missile defence, Iraq War, Afghanistan War, disaster relief post Katrina, nuclearization of N Korea, back flip and assistance sought from axis of evil countries), is there anything he actually chose wisely? Is there anything he actually completed to satisfaction? What a screwed up 7 years

 

[sogood]

We see this happening time and time again. For instance, a few short years ago, China was likewise able to plant Chinese informants within the U.S. intelligence circles in order that China could download the U.S.'s classified nuclear data. As I suspect (and many others do) this was why the U.S. bombed the Chinese Embassy in Belgrade but it was too late to prevent China leapfrogging ahead.
Need I mention the U.S. almost handing over port control to the Saudis and this was only just prevented from happening by near hysteria in New York?
Let me put it another way: China isn't employing either Russians, Americans, Europeans or whoever in its highest intelligence circles, so what's secret in China stays secret. China doesn't have to rely on science graduates and specialists from overseas as its producing millions of its own scientists via a free education system.

I would say that Belgrade bombing being one of the most stupid thing the Yanks did, knowingly or unknowingly. Irrespective of intelligence or other benefits, it basically fired up the Chinese people and saw the US for what it is. Up to that point, many Mainland Chinese perceived the US as the snow wonderland and believed all that Hollywood gloss of the US.

As for the intelligence staffing and gathering. Actually, intelligence on China is much easier to obtain for the Western countries through money. As demonstrated on the numerous spy/defection cases to the west, money has been the most effective channel to gather Chinese intelligence data by far. And to date, it has been relatively easy, much easier than the Chinese trying to get any data out of any Western countries.

 

[davidmc]

It is simple. They are cheating by not allowing their currency to float as the U.S. & U.K. (pretty much-everyone) do.

"Putting Pressure On China's Peg"
William Zeus's anger is palpable as he recounts how cheap Chinese imports have forced his company, National Tool and Manufacturing Co., to close two plants and lay off abou t 55 workers in the past couple of years. The problem, according to Zeus, is that China enjoys an unfair advantage in world markets: the artificially low exchange rate of its currency, the yuan.

"There's not a lot to it except arithmetic," said Zeus, whose Kenilworth, N.J., firm makes sophisticated tools and components for makers of molds used in manufacturing. "In our industry the Chinese are often 30 percent, and sometimes 50 percent, cheaper than products made in the United States. A lot of that has to do with the fact that the yuan is undervalued, which means that goods imported from China are cheap."

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/10/AR2005051001460.html
It isn't worth discussing. Besides, their products are made by slave labor (11 yr. old girls working 14 hr. shifts ) Last month I heard a report of an inspection where a foreman was forced to unlock a door thereupon the inspector found a pre-teen girl working amongst others and trying to hide. It is shameful and debilitating to the west's economies

 

[sogood]

It is simple. They are cheating by not allowing their currency to float as the U.S. & U.K. (pretty much-everyone) do.

http://www.washingtonpost.com/wp-dyn/content/article/2005/05/10/AR2005051001460.html
It isn't worth discussing. Besides, their products are made by slave labor (11 yr. old girls working 14 hr. shifts ) Last month I heard a report of an inspection where a foreman was forced to unlock a door thereupon the inspector found a pre-teen girl working amongst others and trying to hide. It is shameful and debilitating to the west's economies

Cheating? How a country sets its currency is none of others' business. You can persude, but you have no right. Wahaha... Which century are you from? Still a proud member of the neocons living in the Cold War era?

BTW, did you hear about the US soldiers who raped Iraqi women and executed innocent civilians in Iraq? It is shamful and debilitating to the Western civilization

 

[11ring]

I think China's US holdings are a complex subject. It is not imply the case that becuase the US ows china money China has the upper hand. Chinese currency holdings illlustrate both the strengths and weaknesses of the US empire. Effectively, becuase the US still controls the worlds financial system and is the world currency, it gets by default near unlimeted acess to cheap credit through low interest bonds it sells to China and Japan.

Without this acess to this cheap credit the US's ability to deficit finance its imperial projects such as in Iraq would be severly limited.

This is a policy which is rational from the perspective of the old chinese economy, as selling massive amounts or RMB kept the currency low and helped make exports cheap.

Now the chinese economy is maturing and building and buying monopolies which do more than just process and export goods. They need technology, brands, R and D, and integrated production, research and marketing systems. The easyest way to get them is to buy foreign multinationals and brands. And this calls for a stronger currency with greater international purchasing power, and or greater internal savings and investment)

Combined with the extra rate of return on invested capital (in china or overseas) as opposed to US bonds, there is a massive incentive to stop buying bonds and start buying foreign or generating internally productive capital.

To make it short, China is bankrolling the US empire because it is still tied to a low valuation policy and the defualt way to do this is buy US dollars. As this becomes increasingly economically irrational the US is going to begin face the prospect of a reduction in its access to cheap credit, and a more agressive form of chinese finance capital.

 

[sogood]

To make it short, China is bankrolling the US empire because it is still tied to a low valuation policy and the defualt way to do this is buy US dollars. As this becomes increasingly economically irrational the US is going to begin face the prospect of a reduction in its access to cheap credit, and a more agressive form of chinese finance capital.

China's massive foreign reserve is primarily in USD up to this point. And yes, it's bank rolling US economy to a significant extent. This is something that the US politicians don't like to talk about in front of their voters. While the politicians blames their economic incompetence on RMB's exchange rate, a bit of a scape goat if you wish. And very sadly, many Americans believe Fox News is the truth channel.

 

[davidmc]

Cheating? How a country sets its currency is none of others' business. You can persude, but you have no right. Wahaha... Which century are you from? Still a proud member of the neocons living in the Cold War era?

BTW, did you hear about the US soldiers who raped Iraqi women and executed innocent civilians in Iraq? It is shamful and debilitating to the Western civilization

I see we have a graduate from the London School of Economic's...NOT You need to stick to your specialty-whatever that might be Incidentally, is that a womens frame bike in your avatar In regard to your comment about soldiers (don't know how that fits into this thread ) I heard that the Chinese Secret Police are doing a swimmingly good job themselves