China Will Be A Bigger Economy Than The US By 2016

Discussion in 'China' started by huaxia rox, Mar 26, 2013.

  1. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    Isn't It Wonderful That China Will Be A Bigger Economy Than The US By 2016? - Forbes

    We’ve a prediction that the Chinese economy will be larger than the US one by 2016. Isn’t that just absolutely wonderful?

    China‘s economy expanded last year at 7.8pc – its slowest pace in more than a decade – and recent data has fuelled concerns that any rebound in the country’s growth is losing steam.

    However, the OECD was upbeat, predicting in a new survey of China’s prospects that the country’s economy could expand by 8.5pc this year and by 8.9pc in 2014.

    While the OECD noted the slowdown in China’s aggressive expansion, it nonetheless predicted that growth should average 8pc in this decade at current rates of investment and reform.

    After allowing for price differences, it forecast that China could become the world’s largest economy, overtaking America, around 2016.

    It is only a prediction and as the man said, prediction, especially about the future, is difficult*.

    And here’s a clue or two to why this is such a wonderful thing to happen:

    At the recently built head office of Zhejiang Hongyu Medical Commodity Co.Ltd – the medical supplies firm which also sells to the UK’s 99p Stores and Castleford-based firm OTL – factory workers said they put in 10-hour days, with two days off each month. For that, they are paid around £320.

    Still, they say, the work is good. “I’m quite content with my job otherwise I wouldn’t have stayed here for so long,” said Wang Jinfang, a 42-year-old who has worked at the factory for 10 years.

    Back at the turn of the millenium factory wages in China were more like $1,000 a year. Now, as you can see, they’re around $5,000, $6,000 a year. That’s a startling rise in incomes for what is, after all, the home of some one sixth of our fellow humans. A serious increase in human happiness and wealth in fact. As to why they’ve been increasing:

    But the party may not last for ever. Local factory owners said overheads were rising and complained that it was increasingly hard to find staff. Mr Cohen said he had also heard talk of jewellery manufacturing being moved to Vietnam because wages and other costs there were cheaper.

    Mr Wu, the owner of the scarf manufacturer Wells Knitting, admitted he was also feeling the strain of rising production costs and planned to retreat to his home province, Henan, in five years time to open a business there.

    It’s all happening just as Marx said it would. Capitalists are indeed greedy for profits. So, if there are profits to be made by employing people then capitalists will compete amongst themselves to employ the people out of whom they can make profits. And once that “reserve army of the unemployed” is exhausted, the end result will be rising wages for the workers. Exactly what we’re seeing happening here.

    And as to why it’s happening, that’s simple too: globalisation. We, that’s all of us, are simply both more willing and more able to buy the things made by poor people in poor parts of the world. This makes us better off: we get stuff for cheap. But it also makes the people making the stuff better off: see that 6 times rise in Chinese wages in only 13 years. We get better off, they get better off, isn’t it all just the most remarkable demonstration of the truisms that Adam Smith and David Ricardo laid out two centuries and more ago? The division of labour, the specialisation of it and the trade in the resultant production makes everyone richer.

    It’s worth noting that even as China’s economy approaches, even surpasses, that of the US the Chinese won’t be gaining US living standards. For there are four times more of them than there are of Americans, so the same value added (this is what GDP measures, the value added in an economy) must be divided by four to give average living standards. But it is a huge advance in human happiness that this is happening. Over a billion people getting rich simply by making things that we want to buy.

    As my boss at the Adam Smith Institute in London, Madsen Pirie, is wont to say. If you care about the poor of this world then buy things made by poor people in poor countries. For as above, it’s the one thing we’ve really ever found that makes them richer.

    Which leads me on to a larger point. Yes, I know, this globalisation, this neoliberalism, supposedly it’s put forward by those who are just mouthpieces for the 1%. Simply apologists for the capitalists running pigdogs. But the truly remarkable thing about it is how pro-poor the outcomes actually are. The last 30 odd years of this globalisation thing have led to the largest reduction in poverty in the entire history of our species. Fewer people are absolutely poor than they were, a smaller portion of humanity is absolutely poor. It’s actually been so extreme that global inequality is falling too.

    China’s getting rich which is a wonderful thing. Huge swathes of our fellow humans are moving from destitution to the petit bourgeois pleasures of a roof over their heads, a change of clothes and three squares a day. And all just because we’re now allowed to buy the things that they’re willing to make.

    Ain’t that great? Something to be celebrated? Globalisation actually works, it reduces poverty.

    *There are a number of versions of who said this but I would go with Nils Bohr.
     
  2.  
  3. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

    Joined:
    May 25, 2009
    Messages:
    10,233
    Likes Received:
    3,896
    Location:
    Holy Hell
    I think they are referring to PPP.
     
  4. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    if you pay me my salary.....if its $1000 per month.....you should pay me either 1000 US bucks....or rupees equal to 1000 US bucks....or RMB equal to 1000 US bucks.......

    no one uses PPP methods to count or pay salary......
     
  5. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    500 US dollars=around 3000 RMB

    3000 RMB per month is a very normal monthly salary in many factories in prc.......

    $500X12=???

    Now, as you can see, they’re around $5,000, $6,000 a year.
     
  6. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

    Joined:
    May 25, 2009
    Messages:
    10,233
    Likes Received:
    3,896
    Location:
    Holy Hell
    From the article,

    Hence PPP. It is unreasonable to expect a nominal growth of 200% in the next 2 or 3 years.
     
    W.G.Ewald likes this.
  7. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    1 the point here is not about 2016 which happens to be the original title of the article here......what i ve tried to emphasize is seldom can i find information from the west to directly point out the salary of average workers in prc....

    2 ppp doesnt mean anything apart from making poor countries feel better.....the only thing i care is nominal GDP per capita which prc is still far behind the us or even south korea.....but this article indicats the progress prc has made by presenting some figures about individual incomes.....

    3 prcs nominal GDP will grow faster then the so called 7.5% which is the bottom line considerred by the gov because RMB on the one hand will keep going up against USD and on the other hand is the currency of a nation that will keep having mild inflation (you cant find too many currencies have these 2 charicters at the same time can you?).....all effetcs combined growth will be greater than it seems to be.....
     
    Last edited: Mar 26, 2013
  8. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

    Joined:
    May 25, 2009
    Messages:
    10,233
    Likes Received:
    3,896
    Location:
    Holy Hell
    Reduced conversion factors don't equate to growth in the way you think it does. In the end you are using RMB, not dollars. Nominal GDP in dollars is just a theoretical estimate, what matters to a Chinese is the GDP size in your own currency. It won't do much to an average Chinese if RMB is 10 to a dollar or 1 to a dollar.
     
  9. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    of course it does in many ways....

    eg in theory apprecian of RMB against USD can make oil import cheaper in prc so customers (individuals or factories) can pay less....so more wealth can be kept within prc.....and some costs of manufacturing thngs also reduce therefore...........

    besides the method of caculating GDP using USD is because of the dominance of USD.....and we have different currencies......you have to find some fair ways to caculate the economy of different areas so better accept this........
     
  10. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    so what,even if CHina's GDP surpasses USA in 2016?
    CHina's population is 4 times of USA's, that is mean,CHina's per capital GDP is still only 1/3-1/4....


    so, We chinese still have a long way to make China the greatest country and make Chinese civilization the proudest one.
     
    satish007 likes this.
  11. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    BTW, the article's conclusion is based on PPP, instead of nominal GDP...


    Chinese nominal GDP won't catch up with USA's until 2020, I think.
     
  12. roma

    roma NRI in Europe Senior Member

    Joined:
    Aug 10, 2009
    Messages:
    3,247
    Likes Received:
    1,861
    surprising you didn't see the sarcasm in the article ?? :wave:
     
  13. t_co

    t_co Senior Member Senior Member

    Joined:
    Dec 20, 2012
    Messages:
    2,537
    Likes Received:
    699
    Location:
    China
    I don't - care to explain?

    Also, when is India's GDP going to catch up to the United States?
     
  14. p2prada

    p2prada Stars and Ambassadors Stars and Ambassadors

    Joined:
    May 25, 2009
    Messages:
    10,233
    Likes Received:
    3,896
    Location:
    Holy Hell
    For the sake of a mature discussion, I would say we would take at least ten years more after China does.
     
  15. G90

    G90 Regular Member

    Joined:
    Feb 25, 2012
    Messages:
    239
    Likes Received:
    13
    With an average IQ of 81, i would say never.

    As for this forecast, I think China's econmoy will surpass USA by 2017-2018 in terms of nominal meausre, instead of PPP.

    As for some who claimed how China's GDP cannot be doubled in 4-5 years, well, the key word here is measured by USD.

    Actually China's GDP get more than doubled, (Nominal, not PPP), since the US meltdown (2008), jump from 3.2 trillion USD (2007) to 8.3 trillion USD (2012), in the mean time I heard people forecasted the world economy metldown will bring China econmy to our kneels whilst the Joke called India, due to they are less dependant on trade, will surpass China.

    As always, these joke can never get their forecast on China right, in raw $ number, China GDP grow by 155% in the mean time, whilst india's GDP grow by merely 50% over the same time and the US GDP grow by about 2% in the mean time, and the Europe tanks.:rofl:

    But retards tend to forecast China's econmy collapse again in the future, I think fools are born fools, just let them be:rofl:
     
  16. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    when CHIna's nominal GDP surpass USA's, GDP will not be ranked by USD,but RMB.
     
  17. satish007

    satish007 Senior Member Senior Member

    Joined:
    May 7, 2011
    Messages:
    1,458
    Likes Received:
    202
    Location:
    China
    Chinese fornumer should low profile and humility.
    silence makes you rich.
    we can use less money to get more dead pigs/ducks so our PPP is pretty high.
    Badguy keeps a cool head, Great minds think alike.
    we should work with US and India, grow together. strong India/China make world more peace.
     
  18. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    if our territory can be invaded by some average minor countires and the gov dare not challenge.......how much more GDP cant change the US dominance of........everything......
     
    Last edited: Mar 27, 2013
  19. badguy2000

    badguy2000 Respected Member Senior Member

    Joined:
    May 20, 2009
    Messages:
    4,957
    Likes Received:
    613
    CCP government dare not challenge those average minor countries,not because CHina fear them,but CHina fear the big boss behind them,,,that is USA.....

    When China can skew USA,those average minior Countries will run aways like stunning rabbits.
     
  20. huaxia rox

    huaxia rox Senior Member Senior Member

    Joined:
    Apr 4, 2011
    Messages:
    1,401
    Likes Received:
    103
    yes so we need to have the ability of taking them out without having to consider if the us will interfere....then the USD dominance can be challenged.......

    this is not about merely GDP........
     

Share This Page