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[size=10pt]China's economy to become world's biggest in 2035 -- study [/size]
http://business.inquirer.net/money/breakingnews/view/20...est-in-2035----study

Agence France-Presse
First Posted 09:01:00 07/09/2008

WASHINGTON -- China’s economy will overtake that of the United States by 2035 and be twice its size by mid-century, a study released Tuesday by a US research organization concluded.

The report by economist Albert Keidel of the Carnegie Endowment for International Peace said China's rapid growth is driven by domestic demand more than exports, and will sustain high single-digit growth rates well into the 21st century.

"China's economic performance clearly is no flash in the pan," Keidel writes.

"Its growth this decade has averaged more than 10 percent a year and is still going strong in the first half of 2008. Because its success in recent decades has not been export-led but driven by domestic demand, its rapid growth can continue well into the 21st century, unfettered by world market limitation."

Keidel said the rise of China to the world's biggest economy will happen regardless of the method of calculation.

Under current market-based estimates, China's gross domestic product is about $3 trillion compared to $14 trillion for the United States.

Based on a more controversial purchasing power parity (PPP) measure used by the World Bank and others to correct low labor-cost distortions, he said China's GDP is roughly half of that of the United States.

"Despite this low starting point, if China's expansion is anywhere near as fast as the earlier expansion of other East Asian modernizers at a comparable stage of development, the power of compound growth rates means that China's economy will be larger than America's by mid-century -- no matter how it is converted to dollars," Keidel wrote.

"Indeed, PPP valuation distinctions will diminish and eventually disappear."

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Originally posted by Sgt_Schlappy:
If things stay as they are now, I wouldn't be surprised to see this happen by 2020-2025.

Then again, if the Chicoms are finally forced to stop their currency manipulation, , slave labor practices and other trade violations, I could see their economy imploding even sooner.

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Originally posted by Enssantor:
Interesting. When I was in Beijing for a semester studying under Bei Da professor Dr. Pan Wei, he said that the PRC would surpass, if not just equalize 1st world nations like the US in GDP per capita and standard of living within the next 20-30 years, IIRC.

quote:

[size=10pt]China's economy to become world's biggest in 2035 -- study [/size]
http://business.inquirer.net/money/breakingnews/view/20...est-in-2035----study

Agence France-Presse
First Posted 09:01:00 07/09/2008

WASHINGTON -- China’s economy will overtake that of the United States by 2035 and be twice its size by mid-century, a study released Tuesday by a US research organization concluded.

The report by economist Albert Keidel of the Carnegie Endowment for International Peace said China's rapid growth is driven by domestic demand more than exports, and will sustain high single-digit growth rates well into the 21st century.

"China's economic performance clearly is no flash in the pan," Keidel writes.

"Its growth this decade has averaged more than 10 percent a year and is still going strong in the first half of 2008. Because its success in recent decades has not been export-led but driven by domestic demand, its rapid growth can continue well into the 21st century, unfettered by world market limitation."

Keidel said the rise of China to the world's biggest economy will happen regardless of the method of calculation.

Under current market-based estimates, China's gross domestic product is about $3 trillion compared to $14 trillion for the United States.

Based on a more controversial purchasing power parity (PPP) measure used by the World Bank and others to correct low labor-cost distortions, he said China's GDP is roughly half of that of the United States.

"Despite this low starting point, if China's expansion is anywhere near as fast as the earlier expansion of other East Asian modernizers at a comparable stage of development, the power of compound growth rates means that China's economy will be larger than America's by mid-century -- no matter how it is converted to dollars," Keidel wrote.

"Indeed, PPP valuation distinctions will diminish and eventually disappear."

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Agence France-Presse - 3/5/2009 7:05 AM GMT

Wen declares China can ride out economic storm

Premier Wen Jiabao said Thursday that China was facing unprecedented challenges from the global crisis but he was confident the country would still achieve growth of about eight percent this year.

In his annual "state of the nation" address to open parliament, Wen gave the most detailed blueprint yet of a four-trillion-yuan (585-billion-dollar) stimulus plan aimed at steering China through the downturn.

The premier acknowledged the Chinese economy, the third-biggest in the world, was hurting and the climate was not expected to get better soon in the face of a global recession that has weakened demand for Chinese goods.

"We face unprecedented difficulties and challenges. The global financial crisis continues to spread and get worse," Wen told the 3,000 delegates gathered for the Communist Party's showpiece political event of the year.

"Demand continues to shrink on international markets. The trend for global deflation is obvious and trade protectionism is resurgent," he told the lawmakers, who will be gathered for nine days.

But Wen said China's economy was still expected to grow by about 8.0 percent this year -- a rate officials have stressed is needed to prevent social unrest triggered by widescale unemployment.

"We are fully confident that we will overcome difficulties and challenges, and we have the conditions and ability to do so," Wen said.

China's economic growth dipped to 6.8 percent in the final quarter of last year, worrying figures for a government long used to double-digit expansions and marking a dramatic slowdown from 13.0 percent growth in all of 2007.

The slowdown in China's economy, which is reliant on exports to developed economies that are now in recession, has made 20 million rural migrant workers jobless in recent months amid countless factory closures.

China typically sees tens of thousands of protests each year even in economic boom times, and rising unemployment has fuelled fears among the communist leadership of social unrest.

Wen also acknowledged problems that could fuel tensions and had been exacerbated by the crisis, such as an inadequate social safety net and health care system, as well as a wealth gap and corruption.

But he said the 8.0-percent target was achievable and would provide a sound platform for creating millions of jobs and soothing social tensions.

"Maintaining a certain growth rate for the economy is essential for expanding employment for both urban and rural residents, increasing people's incomes and ensuring social stability," he said.

Wen's assessment was more optimistic than that of the International Monetary Fund, which has forecast economic growth for China this year of 6.7 percent.

Highlighting unrest concerns, security was tight around the Great Hall of the People, where parliament was sitting, and dissidents told AFP that authorities had placed new restrictions on their movements.

"There are police stationed outside 24 hours and I can't go anywhere unless I travel in a police car," dissident Gao Hongming told AFP by phone from his Beijing home.

Adding to the sense of unease are tensions surrounding China's 58-year rule of Tibet as a sensitive 50th anniversary of a failed uprising falls on March 10.

Wen gave details of the wide-ranging plan for the four-trillion-yuan stimulus package, which is to be spent over two years and contribute to a record budget deficit of 950 billion yuan (140 billion dollars) in 2009.

This included plans to boost domestic consumption, raise incomes for the nation's roughly 800 million people living in the countryside and give support for the steel, auto and other industries.

Spending to improve the social safety net will increase 17.6 percent this year to 293 billion yuan, Wen said.

The budget for medical and health care will rise 38.2 percent to 118.06 billion yuan, according to budget papers, with Wen pledging that health insurance would cover 90 percent of the population in three years.

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A revolution is not a dinner party. Thoughts about the future of China

Filed under: Geopolitical news — Tags: china, gordon chang, mao tse-tung, michael pettis, revolution — Fabius Maximus @ 12:01 am
This is a follow-up to Will China collapse? (5 August 2008).

Recent analysis:

“Get ready for lower Chinese growth“, Michael Pettis, op-ed in the Financial Times, 29 July 2009
”The spend is nigh“, Economist, 30 July 2009 — “The second article in our series on global rebalancing asks whether China can reduce its trade surplus by consuming more.”
“China’s economic policy: A ‘Great Wall’ or Capuan complacency?“, Arthur Kroeber, Financial Times, 11 August 2009 — See excerpt below.
Excerpt from The Coming Collapse of China, Gordon G. Chang — See excerpt below.
Quote of the decade about China

Secondly, a revolution is not a dinner party, or writing an essay, or painting a picture, or doing embroidery; it cannot be so refined, so leisurely and gentle, so temperate, kind, courteous, restrained and magnanimous. A revolution is an insurrection, an act of violence by which one class overthrows another.
— Mao tse-tung, “”Report on an Investigation of the Peasant Movement in Hunan”, March 1927

(3) China’s spirit is not a Great Wall

“China’s economic policy: A ‘Great Wall’ or Capuan complacency?“, Arthur Kroeber, Financial Times, 11 August 2009 — Excerpt:

The Romans bounced back from calamity because they had a resilient set of alliances based on well-developed political and economic ties and a constitutional system that enabled a broad array of talent to come forward and express itself. No error lasted too long unchecked.

… China’s ability to maintain economic growth of around 8% despite the global shock took many by surprise. But this ability has nothing to do with systemic advantages, a distinct “China model” of growth, or skill in macroeconomic management.

… China’s present economic vitality results from a Great Wall all right – a Great Wall of borrowed cash. There is nothing remarkable or spiritual about an economy growing at 8 per cent when credit is allowed to expand by 34%.

The fact becomes even less remarkable when we recognise that nominal GDP (the appropriate comparator for nominal credit growth) grew just 3.8% in the first half. In other words, 10 dollars of new loans were required to generate just one dollar of economic growth.

In fact China’s first-half growth shows one thing and one thing only: the existence of a powerful state with the ability to commandeer its citizens’ wealth and plough it into more buildings, bridges and roads, with no regard for the return those investments will bring.
(4) Excerpt from The Coming Collapse of China, Gordon G. Chang (2001)

There are plenty of Chinese this evening, but nothing is horrible and no one is sad. If anything, some are a bit too merry. The crowd, numbering in the hundreds, is boisterous as free-flowing liquor enlivens the revelers on the rooftop terrace of Shanghai’s historic Peace Hotel. The city around them is sparkling, floodlit in clashing colors against a pitch black sky, and the Huangpu River just below is bustling with commerce even at this late hour.

On the roof this perfect evening the wealthy and the famous mingle with Shanghainese on the make; pride, arrogance, and envy all on display. Personalities in black tie chat with gentlemen in long gray robes, and women in floor-length gowns mix with friends in tight-fitting qi pao split almost to the waist.

Guests have traveled across China and halfway around the world to be on display this evening in the radiant city that is Shanghai. But now the guests take their seats and the table chatter slowly dies. They look at the figure standing before them this Saturday evening in October 1999, just days after the fiftieth anniversary of the People’s Republic. The ornate ballroom at the top of the Peace Hotel is finally quiet.

The tall American woman is particularly striking; she’s in her finest revolutionary red. Her gown, covered in hundreds of Mao buttons of red and gold, is a fashion statement, however, not a political one, because she’s here to have fun. She takes a look around the room before starting. “The Revolution has become a dinner party,” says Maggie Farley, and the crowd cheers.

Yes, the revolution has become a dinner party. The People’s Republic today is not gentle, temperate, or kind, but it is not revolutionary either. The country and the party that leads it are now both old in their ways. The zeal that carried Mao from near defeat to total victory has been spent, lost in all the campaigns and programs that have gone wrong. Here, in the city where the Chinese Communist Party was born, there is nothing that is revolutionary. Nothing, that is, except the opponents of the current regime. They are weak today, but that will change.

The Chinese now want something different, as they did at the end of the Qing Dynasty and at the fall of the Kuomintang. The people are no longer poor and blank. They know what they want. The Chinese will take what they want one day, and that day will be soon.

The truth is that Party cadres will have only themselves to blame when that time comes. They have, over more than five decades, failed. Their republic is corrupt, repressive, and brutal. Its sheet of paper is no longer unblemished. China, for all its recent progress, is still poor. Chinese history has a pattern: governments like the current one fall.

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Enssantor