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COMMENTS:
big difference there is that their economy is growing at 25% a year, compared to our 2%.
by LCD on Mon May 08, 06 3:54pm
[+]
why do you think western nations are already lining up india as a replacement for china? i've said it a few times on here and i'll say it again -- china's economy is not strong. it is built on mass producing cheap consumer goods. and they are totally export driven and have virtually no domestic market. does not surprise me and its no surprise to many in the financial world.
lcd, our economy grew over 4%
and china's grew by 9% in 2005. not sure where you got 25%??
"The Organisation for Economic Co-operation and Development (OECD) said last month that it expects the Chinese economy to grow by 9.3% in 2005, rising to 9.4% next year and 9.5% in 2007."
they also report that despite a sharp upward revision of china's gdp, economic output per person is still quite low.
"We still have a long way to go to catch up with the developed countries," Mr Li said.
I think many factors; their rising debt, the governments involvment in the economy and extreme nepotism, mismanagement of resources, a stagnant population growth (possibly negative), and a huge population of workers that are about to hit retirement (think the boomer generation times 100), will all contribute to a burst in chinas economic bubble in the not-too-distant future. I doubt they'll ever go back to where they were, they won't disapear as an economic force, but fears of them becoming the economic powerhouse of the entire world are over exaggerating the situation. People said almost the same thing about japan, and they were far better at managing their economy and they'd made the right moves to transition from a cheap labor manufacturing state to a modern industrialized state (education, workers protections, modernized factories, etc), which china isn't doing as rapidly or as extensively as they need to.
I've got a feeling the chicoms are setting themselves up for a big fall soon.
India is probably a safer bet. They're growing slower, but that's actually a good thing, even the chinese are worried their economy is growing too fast. And the indians are matching their growing economy with education and increases in civil and economic freedom.
i don't know. i do know that the propaganda was always overblown. they have something like 750 million workers to keep employed. not an easy task. by the end of 2006 china's economy will be about $8.9 trillion and the u.s economy should be about $13.2 trillion. thats a difference of about $4.3 trillion (or just a little under japan's economy in size).
the problem is that there is no way growth in china can keep pace with employment and other civil demands, so the disparity between the poor and drastically poor will only get worse in china. in order for china to really be a long-term powerhouse, they would need an economy of about $30 trillion. thats not happening anytime soon.
i think they will always be a major economic force, or at least for the long-term, but much of the hype was advanced my the general media. financiers and and economic analysts know that their viability is limited. why do you think they want taiwan? reason -- taiwan has manufacturing capabilities that are more advanced and are designed to produce high-demand durable goods, where as china's are designed to produce things that consumers want, but don't actually need.
^ man, i've been spending way too much time with my grandfather.
From the BBC:
According to Credit Lyonnais, China's debts are on a par with those of recession-struck Japan.
Dr Jim Walker, Chief Economist at Credit Lyonnais, described the report's findings as "alarming," but said he believes the Chinese government is doing enough to avoid a major financial crisis.
Much of the problem stems from the way in which China's big four state banks were forced to support state-owned enterprises in the past.
The government wanted to avoid corporate failures and consequent mass unemployment.
But banks are beginning to operate more commercially, analysts say.
"The state sector is very rapidly now being shrunk," Dr Walker told the BBC's World Business Report.
"Private sector growth is much higher quality growth, the return on that growth is higher quality, and therefore the tax revenues and the ability to service high debt is actually improving in China really quite dramatically," he said.
* * * * * * * *
The "ability to service high debt is actually improving?" That's more than can be said for the U.S. under the present administratiaon.
^ who is that little guy you use in your posts? is that fat albert? is it gary coleman? at first i thought it was flava flav, but nah, flav shaves his head. so who is he? i'm intrigued.
I believe he was made by Mags. I think he's kind of a generic, sixties afro guy. He's kind of cute.
^ yes, he is indeed. 
It will be problematic but not too bad.
btw, China's economy cannot continue growing at this rate. Remember when Japan was booming?
According to the Wall Street Journal, "China...is expected to hold $1 trillion in (currency)reserves in dollars by year's end."
In other words, if the Chinese wanted to, they could pay off their national debt with what they have in the bank right now, just by cashing in the currency they hold in dollars.
Any huge debt, IMO, is a cause for possible concern. They'd do well to keep an eye on it and do what they can to manage it.
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