China becomes world's no.3 economy

[Mid]

China becomes world's no.3 economy
14/01/2009

Beijing - China upwardly revised its 2007 growth figures Wednesday, indicating the Asian giant overtook Germany as the world's third largest economy, analysts said.

China's economy expanded by 13.0 percent in 2007, up from a previous calculation of 11.9 percent, the National Bureau of Statistics said.

The economy was worth 25.7 trillion yuan in 2007, the statistics bureau said, or about 3.5 trillion dollars based on the exchange rate at the end of that year.

"At market exchange rates, China in 2007 was the third largest behind the US and Japan," said Vivek Arora, senior resident representative with the IMF in Beijing, told Dow Jones Newswires.

"It indicates the speed of economic growth in the year was beyond what people previously imagined. The economy was overheated beyond what people estimated," said Ren Xianfang, a Beijing-based analyst with Global Insight.

"The figures here mean China has surpassed Germany," she said, citing World Bank estimates. "Germany's economy was 3.3 trillion dollars in 2007 while China's economy was much bigger than that."

China is now only behind the United States, whose economy was worth 13.8 trillion in 2007, and Japan, at 4.4 trillion, according to World Bank figures.

China became the fourth largest economy in 2005, when it grew 10.4 percent, speeding past France, Britain and Italy.

The revision put the 2007 economic growth second only to the 13.1 percent growth seen in 1994, Ren said.

But the revised figures could serve only to make the slowdown between 2007 and 2008 appear sharper, economists said.

"The change in GDP estimates for two years ago will not alter the economy's near-term outlook," said Sherman Chan, an economist with Moody's Economy.com.

"The only effect is perhaps negative, as a stronger 2007 would make the 2008 slowdown more upsetting," she wrote in a research note.

China is expected to release its full-year economic figures for 2008 next week.

The Chinese economy grew by nine percent in the third quarter, the lowest rate in over five years, and the World Bank has forecast 2008 growth of 7.5 percent, a level not seen since 1990.

"For 2009, a further slowdown is projected, as the global economy remains in a dismal state, hurting China's export-related businesses, which have been the bread winner for the country," Chan said.

The bureau said this was the final revision for 2007 economic numbers, after reporting in January last year that growth was 11.4 percent, then upgrading it to 11.9 percent in April.

bangkokpost.com

[Butterfly]

These figures are meaningless, because China is definitely no Germany in terms of rich society,

and who knows how those numbers are being computed, the IMF is probably being fed official numbers from the Chinese government

[Norton]

These figures are meaningless, because China is definitely no Germany in terms of rich society,

Agree as it relates to GDP/capita but the total GDP of China is huge because of the incredible magnitude of it's economic output.

Based on China's exports alone, I would say the IMF numbers are fairly accurate.

[Kikiat2009]

well duh, china is bigger than the whole of Europe and has more people, if you really want to compare you should compare china's economy with that of the EU.

then china still has a long way to go.

[panama hat]

Population and land mass

USA - 300 million, 9.8 million sq kms
Japan - 130 million, 378,000 sq kms
China - 1.3 billion , 9,6 million sq kms
Germany - 80 million, 357,000 sq kms

Germany definitely batting way above their league , , , not sure I'd trust official figures out of China , , , on the other hand their artificially low yuan should have brought China into third spot last year already

[Norton]

Germany definitely batting way above their league

If we use geographic size then Russia and Canada are really in sad shape.

[Norton]

china is bigger than the whole of Europe and has more people, if you really want to compare you should compare china's economy with that of the EU.

If we did the EU with it's 27 (or is it 28 now?) countries would be number one followed by the US, Japan and China.

[Lynn]

I love reading trash like this because it gives me a chance to rant.
Have you ever wondered why you or a lot of people in your home country are out of a job? It is because you sheep people believe the crap most organizations (whether public or private) try to shove down your throats. When will you wake up and try only to buy the products made in the country you are living in, but it is okay with me who you choose to give your money to. If you magnify it by a few million people, then you can see why there is no manufacturing done in your country. It has all gone offshore along with most of the wealth that was supposed to help your other countrymen...End of rant.

[panama hat]

^ . . . and you are trying to say . . . what exactly? This has to do with the topic . . . what?

[Rural Surin]

These figures are meaningless, because China is definitely no Germany in terms of rich society,

and who knows how those numbers are being computed, the IMF is probably being fed official numbers from the Chinese government

If it's any consolation, China is wealthy historically that no one can match.

[Rural Surin]

I love reading trash like this because it gives me a chance to rant.
Have you ever wondered why you or a lot of people in your home country are out of a job? It is because you sheep people believe the crap most organizations (whether public or private) try to shove down your throats. When will you wake up and try only to buy the products made in the country you are living in, but it is okay with me who you choose to give your money to. If you magnify it by a few million people, then you can see why there is no manufacturing done in your country. It has all gone offshore along with most of the wealth that was supposed to help your other countrymen...End of rant.

You must be merkin, Lynn

[Rural Surin]

Curiously, I have to wonder toward the systems that invent these fuzzy ideals of wealth, than procede to throw superlatives and comparatives at a chaotic mess. Since most universally accepted wealth and value is basically based on nothing {credit, speculation, imaginary,etc} than shouldn't reflective physical infrastructures be base accordingly? There isn't any wealth...not as we see it.

[Norton]

You must be merkin, Lynn

Just can't resist the temptation can ya RS.

Walmart, America's most successful retailer has practically nothing made in America.

[Butterfly]

If it's any consolation, China is wealthy historically

It's culturally a very rich country, could have been richer though if it wasn't for Mao destruction of their past

[panama hat]

If it's any consolation, China is wealthy historically

It's culturally a very rich country, could have been richer though if it wasn't for Mao destruction of their past

Indeed, the great leap forward that was several steps backwards and the cultural revolution which was anything but . . .

[Mid]

China overtakes Japan as No.2 economy: FX chief
Aileen Wang and Alan Wheatley
Friday, Jul. 30, 2010


Cheung Kong Centre is seen in Hong Kong's financial Central District.
Tyrone Siu/Reuters

BEIJING — China has overtaken Japan to become the world's second-largest economy, the fruit of three decades of rapid growth that has lifted hundreds of millions of people out of poverty.

Depending on how fast its exchange rate rises, China is on course to overtake the United States and vault into the No.1 spot sometime around 2025, according to projections by the World Bank, Goldman Sachs and others.

China came close to surpassing Japan in 2009 and the disclosure by a senior official that it had now done so comes as no surprise. Indeed, Yi Gang, China's chief currency regulator, mentioned the milestone in passing in remarks published on Friday.

"China, in fact, is now already the world's second-largest economy," he said in an interview with China Reform magazine posted on the website (»¶Ó[at]·ÃÎʹú¼ÒÍâ»ã¹ÜÀí¾ÖÍøÕ¾!) of his agency, the State Administration of Foreign Exchange.

Cruising past Japan might give China bragging rights, but its per-capita income of about $3,800 a year is a fraction of Japan's or America's.

"China is still a developing country, and we should be wise enough to know ourselves," Yi said, when asked whether the time was ripe for the yuan to become an international currency.

CAN IT BE SUSTAINED?

China's economy expanded 11.1 percent in the first half of 2010, from a year earlier, and is likely to log growth of more than 9 percent for the whole year, according to Yi.

China has averaged more than 9.5 percent growth annually since it embarked on market reforms in 1978. But that pace was bound to slow over time as a matter of arithmetic, Yi said.

If China could chalk up growth this decade of 7-8 percent annually, that would still be a strong performance. The issue was whether the pace could be sustained, Yi said, not least because of the environmental constraints China faces.

In an assessment disputed by Beijing, the International Energy Agency said last week that China had surpassed the United States as the world's largest energy user.

If China can keep up a clip of 5-6 percent a year in the 2020s, it will have maintained rapid growth for 50 years, which Yi said would be unprecedented in human history.

The uninterrupted economic ascent, which saw China overtake Britain and France in 2005 and then Germany in 2007, is gradually translating into clout on the world stage.

China is a leading member of the Group of 20 rich and emerging nations, which since the 2008 financial crisis has become the world's premier economic policy-setting forum.

In one important respect, however, China is still a shrinking violet: anxious to shield itself from the rough-and-tumble of global markets, it does not permit its currency to be freely exchanged except for purposes of trade and foreign direct investment.

And Yi said Beijing had no timetable to make the yuan fully convertible.
"China is very big and its development is unbalanced, which makes this problem much more complicated. It's difficult to reach a consensus on it," he said.

In the same vein, China was in no rush to turn the yuan into a global currency.

"We must be modest and we still have to keep a low profile. If other people choose the yuan as a reserve currency, we won't stop that as it is the demand of the market. However, we will not push hard to promote it," he added.

NO BIG RISE IN YUAN

China has been encouraging the use of the yuan beyond its borders, allowing more trade to be settled in renminbi and taking a series of measures to establish Hong Kong as an offshore center where the currency can circulate freely.

But Yi said: "Don't think that since people are talking about it, the yuan is close to becoming a reserve currency. Actually, it's still far from that."
He said expectations of a stronger yuan, also known as the renminbi, had diminished. There was no basis for a sharp rise in the exchange rate, partly because the price level in China had risen steadily over the past decade.

"This suggests that the value of the renminbi has moved much closer to equilibrium compared with 10 years ago," he said.

Yi's comments are unlikely to go down well in Washington, where lawmakers have scheduled a hearing for September 16 to consider whether U.S. government action is needed to address China's exchange rate policy.

China scrapped the yuan's 23-month-old peg to the dollar on June 19 and resumed a managed float. The yuan has since risen only 0.8 percent against the dollar, and economists calculate that it has fallen in value against a basket of currencies.

China would stick to the principle of holding its $2.45 trillion of official reserves in a mix of currencies and assets.

The stockpile -- the world's largest - was so big that it was impossible to adjust its currency composition in a short space of time: "We won't be particularly bearish on the dollar at a given time or particularly bearish on the euro at another time."

financialpost.com

[Sean46]

Wonder when the Thai baht wil follow Yuan instead of U.S. dollars!

[Butterfly]

the problem with GDP numbers published by China is that they are unreliable,

like the WallStreet financial crisis, we rely on numbers not independently computed or estimated based on government sources

China growth is real but don't think their numbers are