Japan-World Trends [English] The author of this blog will answer to your questions and comments. And this is the only place in the world where you can engage in free discussion with people from English, Japanese, Chinese and Russian speaking areas.
JapaneseChineseRussian

Japan Diary


June 28, 2009

This year China overtakes Japan as No.2 economy in the world

This year China will probably overtake Japan as the second largest economy in the world.
"So what? Did it not happen ten years ago?" you may say. One Boston cab driver (he was from Jamaica) told me more than two years ago, "Oh, gosh! You’re telling me that the US is bigger than China in economy? My roommate, he is Chinese, he always tells me the opposite."

Well, size is not that important, quality matters, I believe. Besides, China's economy in dollar terms showed an abrupt rise since last fall largely because of the dollar's steep depreciation.

China's economy is now on a par with Japan's. OK. But it merely confirms the fact that the per capita income of the Chinese is one thirteenth of the Japanese, because their population is thirteen times as big as the Japanese population.

And if you measure China's capacity to project its will overseas, you may notice that military-wise East Asia is still under firm Pax Americana and that Japan's official development assistance surpasses that of China both in quantity and quality.

On top of that, China's rapid economic growth is at a turning point. Since Deng Xiao-ping declared in 1992 a favorable treatment for foreign direct investment in China, its economy never went below 7% of annual real GDP growth. Simply amazing. The large inflow of investment from Taiwan, Hong Kong, South Korea, Japan, the US and Europe, its aggressive exports (about 50% of their exports have been realized by factories under foreign ownership) and construction of housing and infrastructure. They are building at such a pace that you may safely say that the main product of the Chinese economy is high-rise buildings and highways.

But after the world economic crisis China's exports have dwindled by more than 30%. China may well make up for its loss by inflating domestic spending. Yes, they are doing exactly that, but they tend to overdo it. Local banks are desperately giving out loans under the instructions of local party bosses, who are guided not by economic principles but by personal ambition for promotion in bureaucracy. Such a system augments the danger of inflation.

They can not limitlessly boost construction. Any new building cannot be finished without importing foreign materials and furniture. To import these China would need foreign currency. So, the tempo of Chinese economic growth will be tempered by the amount of trade surplus on hand.

True, if they make their currency, the Yuan, convertible, then they can import as much as they want. But a convertible Yuan will trigger a huge speculative purchase of Yuan in expectation of a constant rise in its value. It will push up the Yuan's rate above the heavens so that China will lose its price competitiveness.

-----In such a way the tempo in Chinese economic growth has its natural limits.

I have nothing against China's development; even the contrary. I merely want to stress that there is no overestimating China's power and underestimating Japan's.

Comment

Author: anillo pene | March 31, 2017 11:29 PM

Greetings I am so grateful I found your weblog, I really found you
by accident, while I was searching on Askjeeve for something else, Regardless I am here now and would just
like to say thanks for a fantastic post and a
all round interesting blog (I also love the theme/design),
I don’t have time to go through it all at the minute but I have saved
it and also added your RSS feeds, so when I have time I
will be back to read a great deal more, Please
do keep up the fantastic jo.

Author: 카지노사이트 | November 11, 2017 7:36 PM

Hello my friend! I wish to say that this post is amazing,
nice written and include almost all significant infos.
I'd like to see extra posts like this .

Author: 해쉬 | March 18, 2018 10:24 AM

This paragraph offers clear idea in support of the new people of blogging, that
really how to do running a blog.

Author: posicionamiento Web barcelona isocialweb | April 4, 2018 11:01 PM

Estaba buscando esa informacion hace espacio, te lo agradezco,
estoy de contrato con tu punto de vista y pasto
igual. Despues de buscar mucho por Internet encontre lo que buscaba.

Genial!!! muchas gracias

Author: 안전놀이터 | May 5, 2018 4:59 AM

Thanks for every other informative blog. The place else may I get that type of information writrten in such a perfect way?
I have a challenge that I'm just now working on, and I've been on the look out
for such information.

Author: vnw.us | June 28, 2018 5:13 PM

Yes! Finally something about sỏi thận và các loại thuốc bổ thận tráng dương tốt nhất.

Author: 파워볼게임 | October 21, 2018 1:59 PM

What's up to every one, the contents present at this web page are in fact
awesome for people experience, well, keep up the nice work fellows.

Author: 카지노사이트 | December 19, 2018 10:28 AM

Hi, I believe your blog might be having browser compatibility issues.
Whenever I look at your site in Safari, it looks fine however,
if opening in IE, it has some overlapping issues.
I simply wanted to provide you with a quick heads up!

Besides that, fantastic website!

Author: 식보 | April 15, 2019 2:08 PM

Point out the way you look ahead to his next publish.

Author: info poker online | May 6, 2019 10:37 PM

What's up friends, how is everуthing, and what you wouⅼd like to say on thе topic of this article,
in my view its really amazing in sսpport of me.

Author: 파워볼게임 | June 3, 2019 1:49 PM

It's hard to find knowledgeable people about this
topic, but you sound like you know what you're talking about!
Thanks

Author: SSNI-622 | October 22, 2019 4:23 AM

pretty valuable material, overall I consider this is worthy of a bookmark, thanks

Author: hotel boca brava boca chica panama | October 22, 2019 6:22 AM

Really appreciate you sharing this blog. Really Great.

Author: Named and Shamed Kent | October 22, 2019 8:37 AM

Really appreciate you sharing this article.Thanks Again. Cool.

Author: whatsapp business website integration | October 22, 2019 9:56 AM

I will immediately seize your rss feed as I can not to find your email subscription hyperlink or newsletter service. Do you ave any? Kindly allow me realize so that I could subscribe. Thanks.

Author: Skincare centre Vancouver | October 22, 2019 12:44 PM

Just Browsing While I was surfing today I saw a great article about

Author: vancouver seo | October 22, 2019 3:33 PM

Say, you got a nice blog article.Really thank you!

Author: search engine optimization position | October 22, 2019 6:22 PM

I truly appreciate this article post.Much thanks again. Cool.

Trackbacks

TrackBack URL for this entry:
http://www.japan-world-trends.com/cgi-bin/mtja/mt-tb.cgi/771