It's Official: China will become the world's largest economy tomorrow.

[cabri]

The numbers would also be different if all tbe manipulau done by the Chinese government to their internal economy as well as the valuation of their currency were taken into account.

 

[Mondozei]

So mea culpa! Not today but "this year"!

http://www.ft.com/cms/s/0/d79ffff8-cfb7-11e3-9b2b-00144feabdc0.html

 

[Mondozei]

You can read the full report here: http://siteresources.worldbank.org/...the-2011-International-Comparison-Program.pdf

 

[cyclohexane]

April 30th is the release date of the 2011 ICP series. It is the largest such exercise conducted by the World Bank, which is responsible for it, ever made.

So what is the ICP series? It stands for International Comparison Program. You can read more here.

Why is this relevant? Because the ICP series is the basis for the PPP, or power purchasing parity, which all major economic organizations use to compare countries.

The last ICP series was done in 2005. It was seriously flawed. You can read more here: http://blogs.worldbank.org/developmenttalk/end-long-era

The new series is going to increase China's GDP by a significant amount. Nobody quite knows for certain, but I pinged Branko on Twitter and asked him for his opinion. His estimate was slightly lower than Maddison and slightly higher than Penn, so around 30% or so.

But even if it was "only" 20%, it would still be the largest economy in the world. Of course, China has been the world's largest economy in the world for some time now, but it simply becomes official.

After over a century on the throne, America is no longer #1.
And even more than that, China's per-capita GDP is also going to be substantially higher, hitting a PPP-adjusted 15,000 dollars or so per person this year and over 20,000 when the decade is over. And for the Eastern Coast, it's already at Western European levels.

China's military budget, when adjusted for PPP, is about 35% of America's, but it is growing over 10% per year while America will shrink its budget to the lowest post-WWII, so within no more than 7-8 years, China will have a budget at parity with the U.S. too.

In many ways this is just a return to the old way of the world, which China dominated economically for many centuries. And it will also, likely, reduce America's ability to intervene on an ad hoc basis in the world, especially in the Middle East which is already China's #1 source for oil. No more Iraq adventures. So it might not be a terrible thing, after all, at least initially. Over a decade or two, China will become to America as America is to Russia today.

Only India has the capacity to seriously challenge China this century, but that is still decades away.

Bullshit. Lost all credibility when it said that India could challenge China economically.

 

[Mondozei]

Bullshit. Lost all credibility when it said that India could challenge China economically.

Oh, you are more than welcome to come with some data to back up that opinion. I can easily do the same, I left it out of the original post because this thread is about China, not India per se, but I'll be more than happy to have a data-driven argument.

... Except I have a sneaking suspicion that you don't really have the mental faculties available to have one

But do prove me wrong. This could be very amusing :biggrin:


P.S.

The Economist has a nice graph up illustrating today's news:

http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-19

 

[fskimospy]

Yeah I don't quite get this PPP concept and how it applies across countries. If countries are competing to buy the same goods/resources then only absolute pricing matters, not relative.

Quote from the article:
-----
The easiest way to explain it is to say that PPPs try to account for each good and service using the same price for it around the world, so that a mobile phone, a kilo of rice and a haircut would each be valued the same in China as in the United States.
----

Exactly. The US retains VASTLY more economic power than China does, even if they were to achieve GDP parity in a PPP sense.

Why would it make sense to adjust military budget for PPP? Will it make missiles more accurate? Will it make planes more stealthy? Absolute terms are the only things that matter.

It makes sense insofar as how much of of your military budget is internal. In fact I would say it makes much more sense to compare military budgets on a PPP scale than it does for economic power. ie: China and US both need soldiers, but China can pay their average soldier considerably less than the US does.

 

[cyclohexane]

Oh, you are more than welcome to come with some data to back up that opinion. I can easily do the same, I left it out of the original post because this thread is about China, not India per se, but I'll be more than happy to have a data-driven argument.

... Except I have a sneaking suspicion that you don't really have the mental faculties available to have one

But do prove me wrong. This could be very amusing :biggrin:


P.S.

The Economist has a nice graph up illustrating today's news:

http://www.economist.com/blogs/graphicdetail/2014/04/daily-chart-19

Lol, where was the data-driven analysis that this bbc columnist used before she made that claim? I don't need to prove anything (this is ATPN after all). She, on the other hand, was wildly speculating and wrote a headline grabbing article without adequate proof.

 

[zephyrprime]

Bullshit. Lost all credibility when it said that India could challenge China economically.

Obviously he meant that India is the only country that could challenge China economically because only india exceeds china in the most important area for economic production: population. India's population is nearly that of China's and it will exceed china's soon due to China's declining population due to its 1 child policy.

 

[zephyrprime]

And don't worry, 'Made in China' will soon be replaced by some other non-industrialized nation. I imagine 'Made in Vietnam' will likely be the next one. As China gets more industrialized, the labor costs will rise, and we will move our plants to some other poor, Asian nation.

True, but there is no cheap country that is nearly as large as China is. Vietnam is cheaper than china but it is a small country. India, Indonesia and Nigeria are the only large, cheap countries left. I expect India to become the next big outsourcing spot. Indonesia is also a candidate. Nigeria is too unstable. Also, their oil exports raise their currency prices which hurt their ability to ever be an export driven economy in areas other than oil.

Also, Chinese consumers themselves will start consuming the output of the cheaper manufacturing countries.

The peak of offshoring and outsourcing is over. I expect manufacturing will start to move back into the US and other developed countries now.

 

[norseamd]

india will grow to the 2nd largest economy

 

[Pr0d1gy]

If you still think economics is a real thing then you are not paying any attention, at all.

 

[Svnla]

Not so fast. I do LOL whenever I read/hear about china will become #1.

http://www.bloomberg.com/news/2014-...r-worse-in-china-than-in-u-s-study-shows.html


http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/


http://www.nydailynews.com/news/world/wealthy-hong-kong-poorest-live-metal-cages-article-1.1258661


Don't forget about 20% of agriculture land in china is so polluted it could not be use, then lack of clean water, more old people to take care off (1 child policy), and so on.

 

[norseamd]

Not so fast. I do LOL whenever I read/hear about china will become #1. http://www.bloomberg.com/news/2014-0...udy-shows.html http://www.chinahush.com/2009/10/21/...tion-in-china/ http://www.nydailynews.com/news/worl...icle-1.1258661 Don't forget about 20% of agriculture land in china is so polluted it could not be use, then lack of clean water, more old people to take care off (1 child policy), and so on.

this was covered in a previous p and n shitfest

although i beleive you only made a few posts

regardless the fact that some of you dumb fellows believe that china is not growing in power is ridiculous

 

[norseamd]

not saying that there are not problems with china but america has them too

there can be economic and political and military might even if the environment and lower class citizens are in a shitstand

 

[Svnla]

this was covered in a previous p and n shitfest

although i beleive you only made a few posts

regardless the fact that some of you dumb fellows believe that china is not growing in power is ridiculous

You want more?

Growing fast, them ghost/emty cities = http://content.time.com/time/photogallery/0,29307,1975397,00.html

Shadow banking/currency crisis = http://www.telegraph.co.uk/finance/...nese-banks-could-trigger-global-meltdown.html

Want something extra in your food? = http://www.foodsafetynews.com/2014/...le-rampant-food-safety-problems/#.U2MLPPldVQg

Infected snail meat, poisonous mushrooms, goat meat marinated in duck urine to make it taste and smell like lamb – these are just some of the culinary delights that China’s food industry has served to its citizens since 2006.


Chinese pork dealers tried to pass decaying pig meat off as freshly butchered. Meat labelled as lamb has been found to contain rat, fox and mink meat.

Too much to list them all. Growing power indeed <snickering>

Oh, one more thing, median income of US family is about $50K USD per year, china is about $9K USD per year. Anytime now, eh?

If you or anyone think china will continue to grow with the same rate since 80's, then I have a bridge or two to sell.

 

[BoomerD]

Obviously, there are some things where I have no non-Chinese made alternatives...but when I do...I almost always choose the goods made in a "free" country, rather than Made in China.

 

[norseamd]

Too much to list them all. Growing power indeed Oh, one more thing, median income of US family is about $50K USD per year, china is about $9K USD per year. Anytime now, eh? If you or anyone think china will continue to grow with the same rate since 80's, then I have a bridge or two to sell.

not saying that there are not problems with china but america has them too there can be economic and political and military might even if the environment and lower class citizens are in a shitstand

read

 

[norseamd]

Obviously, there are some things where I have no non-Chinese made alternatives...but when I do...I almost always choose the goods made in a "free" country, rather than Made in China.

you should think the same way when buying products made from large companies

buy from small businesses and quality manufacturers and local residents

 

[BoomerD]

you should think the same way when buying products made from large companies

buy from small businesses and quality manufacturers and local residents

I do...when it's feasible. I prefer to support the small local businesses over the big box stores.

 

[Svnla]

read

I think you need to listen to your own advise and read more. Here is one of many.

http://www.reuters.com/article/2014/04/29/us-china-economy-growth-idUSBREA3S09X20140429

China's resource-dependent and manufacturing-heavy provinces suffered the sharpest growth slowdown in the first quarter as the government pushed to reduce overcapacity and pollution, adding to signs of protracted weakness in the economy.

Annual economic growth in Hebei province, the nation's top steel producer, tumbled to 4.2 percent in the first quarter of 2014 from 8.2 percent in the previous quarter, according to data.......


The combined economic output of China's provinces has long exceeded that of the national level compiled by the National Bureau of Statistics, raising suspicion that some growth-obsessed local officials have cooked the books.

In order to china to catch up and take over as number 1, it MUST maintain the fast growing rate as it has been doing since the 80's and it ain't happening.

Yes, US is having its own problems too but it does not have that bad in environmental and water issues as china.

 

[MongGrel]

Time to fire off a few Nukes, there won't be an opposing economy.

NM I forgot Walmart probably owns our MMIII's these days more or less and is selling crap there.

 

[MagickMan]

China's economy hasn't been communist for years now. China is currently growing like the US did through the industrial revolution. Eventually they will have to enact similar environmental laws that Western countries have. Then they won't be able to afford to manufacture at the current prices and the corporations will move to SE Asia or Africa.

Indeed, but he's much too stupid to understand that. You may have to use smaller words, maybe pictures too. :hmm:

 

[FalseChristian]

China's no match for the Hyperpower that is the U.S.A. and never will be. The U.S.' per capita income is over $55,000 whereas China's is only $10,400. China is still a third-world country in all respects. China doesn't have the tax base to have a strong, modern armed forces let alone challenge the U.S. militarily. No worries.

 

[Olikan]

paranoid thread is full of paranoids

 

[Svnla]

"Sorry, China is NOT about to be No. 1 economy".

Who says that?

This guy, Jeffrey Frankel, a professor of capital formation and growth at Harvard University.

http://finance.yahoo.com/news/sorry-china-not-no-1-110000298.html

And how china could be the next Japan, run out of steam = http://qz.com/198458/zombies-once-destroyed-japans-economy-now-theyre-infecting-chinas/