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China overtakes Japan as No.2 economy, US next by 2025.

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  • Originally posted by DOR View Post
    It must really suck to have nothing worthwhile to say in response to someone whos thought about an issue for 30 years, done the research, and presented a coherent and fact-based description of what actually happened in the past.

    And, despite all that, to still have to just absolutely HAVE TO respond.

    Must really suck.
    Ok keep your hair on. I was just thinking about the Graphs and charts we were presented with back in 2008...they looked like armageddon. I was enjoying the read while having a drink. Afsaki!

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    • Originally posted by DOR View Post
      It must really suck to have nothing worthwhile to say in response to someone whos thought about an issue for 30 years, done the research, and presented a coherent and fact-based description of what actually happened in the past.

      And, despite all that, to still have to just absolutely HAVE TO respond.

      Must really suck.
      Sometimes it's just a case of people dictating to others what they 'want' to be true, instead of what actually 'is' true.

      Cases in point is the military mindset that can be wrong for a lifetime and not just 30 years. Sometimes the military mind is at a disadvantage in wider circles of conversations and discussion. That being because that which comes down from above is NOT to be questioned. Therefore, it would be quite unusual if you were voicing any opinion of your own, as opposed to the opinion of the top brass.

      I don't have to make any case that some top Generals have been completely wrong all their lives. All that's necessary is to not name the country the General works for. Sometimes the corporal who's been in the service for a year is more correct. So stop the bullshit of trying to put a feather in your own cap all the time!

      I stand willingly waiting to be corrected. Or banned from the forum for subversive thinking, whatever comes first?

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      • I read the signature and saw the humour. Humility is a good quality unfortunately not all of us know its existence...

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        • First half 2019

          In the first half of 2019, the Chinese economy grew 6.3% in real terms over January-June 2018, and insert the usual caveats about data quality here. Retail sales turned in a nominal growth rate of 8.4%, which works out to 6.2% after subtracting 2.2% consumer inflation. The broad money supply (M-2) expanded 8.4% nominally, which is broadly in keeping with the other indicators. So, if nothing else at least the statisticians have become better at producing internally consistent data.

          On the international side, exports fell by 0.5% and imports by 4.1%, both in US dollar terms. The trade balance was $30.4 billion and foreign investment actually utilized rose 4.7% to US$70.7 billion.

          Overall, a pretty poor performance but only by China’s high standards.
          Trust me?
          I'm an economist!

          Comment


          • IMF World Economic Outlook, July 2019

            Weak demand, soft trade, muted inflation and much of it is due to policy mistakes such as Trumpism and Brexit. Global GDP is forecast to rise 3.2% this year and 3.5% in 2020, both down from the April 2019 forecast.

            In the Advanced Economies, the pattern is reversed: 1.9% this year, slowing to 1.7% in 2020. Emerging Asia will grow 6.2% in each year, and with the exception of the CIS (1.9% => 2.4%) and sub-Saharan Africa (3.4% => 3.6%), the rest of the developing world is stuck at 1%, more or less.


            Global growth remains subdued. Since the April World Economic Outlook (WEO) report, the United States further increased tariffs on certain Chinese imports and China retaliated by raising tariffs on a subset of US imports. Additional escalation was averted following the June G20 summit. Global technology supply chains were threatened by the prospect of US sanctions, Brexit-related uncertainty continued, and rising geopolitical tensions roiled energy prices.

            Against this backdrop, global growth is forecast at 3.2 percent in 2019, picking up to 3.5 percent in 2020 (0.1 percentage point lower than in the April WEO projections for both years). GDP releases so far this year, together with generally softening inflation, point to weaker-than-anticipated global activity. Investment and demand for consumer durables have been subdued across advanced and emerging market economies as firms and households continue to hold back on long-range spending. Accordingly, global trade, which is intensive in machinery and consumer durables, remains sluggish. The projected growth pickup in 2020 is precarious, presuming stabilization in currently stressed emerging market and developing economies and progress toward resolving trade policy differences.


            Risks to the forecast are mainly to the downside. They include further trade and technology tensions that dent sentiment and slow investment; a protracted increase in risk aversion that exposes the financial vulnerabilities continuing to accumulate after years of low interest rates; and mounting disinflationary pressures that increase debt service difficulties, constrain monetary policy space to counter downturns, and make adverse shocks more persistent than normal.

            Multilateral and national policy actions are vital to place global growth on a stronger footing. The pressing needs include reducing trade and technology tensions and expeditiously resolving uncertainty around trade agreements (including between the United Kingdom and the European Union and the free trade area encompassing Canada, Mexico, and the United States). Specifically, countries should not use tariffs to target bilateral trade balances or as a substitute for dialogue to pressure others for reforms. With subdued final demand and muted inflation, accommodative monetary policy is appropriate in advanced economies, and in emerging market and developing economies where expectations are anchored. Fiscal policy should balance multiple objectives: smoothing demand as needed, protecting the vulnerable, bolstering growth potential with spending that supports structural reforms, and ensuring sustainable public finances over the medium term. If growth weakens relative to the baseline, macroeconomic policies will need to turn more accommodative, depending on country circumstances. Priorities across all economies are to enhance inclusion, strengthen resilience, and address constraints on potential output growth.

            https://www.imf.org/en/Publications/...updateJuly2019
            Trust me?
            I'm an economist!

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            • China: What we thought, back then

              While packing away some old book, I came across a World Bank report issued at the end of September, 1997, entitled China 2020: development challenges in the new century. The issues analyzed at the time offer some interesting insights into how comprehensively that country has changed.
              http://documents.worldbank.org/curat...he-new-century

              The figures produced in this study have since been heavily revised, and a complete data set is available from the World Bank, here: https://data.worldbank.org/country/china?view=chart

              A second, private sector study by Asian Demographics, Ltd, is called ForecastAsia: The region to 2020. It was released in October 2000, and predicts Chinas 2020 population to within 8.5 million of what we think it is today. Thats a margin of error of barely 0.5%.

              It does, however, underestimate urbanization. Whereas the latest estimates are that the urban population has surpassed 60%, this study predicts no more than 45% by 2020. Part of that is likely because of urban centers redefining their borders over the past 40 years, to incorporate cheaper farmland into high value-added cities.

              Where the authors imagination failed them was in growth in incomes. Back in 2000, their measure was average household income, and over time it was thought that it would grow 5.5% per annum in real terms. Per capita GDP, which is not the same measure but a useful proxy, rose 8.4% p.a. in 1979-99, and about the same thereafter
              Trust me?
              I'm an economist!

              Comment


              • That is the moment I have been waiting for the last 10 years. Hope nothing really dramatical happens after China turns #1.

                Comment


                • Originally posted by Bloomberg_markets_and_finance
                  24 May 2022
                  China's Central Bank, Regulator Urge Banks to Boost Lending

                  The People's Bank of China and the nation's banking regulator are urging lenders to boost loans as the economy continues to get battered by pandemic controls. Stephen Engle reports on "Bloomberg Daybreak: Asia."
                  ...
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                  .
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                  Comment


                  • We'll see. There's strong suspicion that China's official economic figures are 'rubbery' at best. Add to that fact it's current COVID policies and its ongoing crackdown on the operations of its largest companies and you end up with a situation where economic output this year has taken a real hit.
                    If you are emotionally invested in 'believing' something is true you have lost the ability to tell if it is true.

                    Comment


                    • Should we worry about China's Debt?

                      China's Balance Sheet Challenge,
                      Nicholas Borst, China Leadership Monitor, March 1, 2023
                      prcleader.org and worldbank.org


                      We begin with three statements:

                      1. China is now much more indebted than countries at similar levels of economic development.
                      2. The slowdown in the economy over the past year has increased pressure on over-leveraged borrowers, and
                      3. That poses risks for the financial system.


                      The data.
                      At the end of 2021 (the most recent data), China's external debt was US$2.7 trillion, according to the World Bank. There are different kinds of debt, long-term (more than one year) and short term (e.g., trade financing); public and private; and publicly guaranteed or not. And, debt may be measured in stock – all debt, accumulated over time and still unpaid – or just that disbursed during the year in question.

                      Trends take time to develop, so looking at longer periods can be useful. In this analysis (because of data availability), I will look it the 2019-21 period as it compares to the previous nine years (2010-18). We will also assume that the data is correct, and no different in quality that that of the United States or other developed nations. That's a very large assumption, but we have nothing better to go on.

                      The long and short of it.
                      Long-term debt stock rose 16% per annum over the past decade (2012-21), while short-term obligations increased by 6.5% a year. That reduced the share of short-term debt from an average of 65.5% in 2010-18 to 54.4% in 2019-21. Since short term principal and interest must be paid in full within a year, less short-term debt is generally better than more.

                      Among the long-term debt, that which the public sector explicitly guarantees decreased from 77.7% in 2010-18 to 72% in the later three years. In other words, the market accepted more risk. The increase in borrowers' ability to repay their short-term debts was even more dramatic, from 10.1% to 19.6%.

                      Who's exposed.
                      The mix of lenders has been evolving as the financial markets have matured. Bondholders increased their exposure to China's total debt from 12.9% to 26.8% over the periods under review, whereas commercial banks reduced their share of the risk along with the World Bank and other official creditors. More, bondholders picked up almost all of the non-guaranteed risk that commercial banks declined.

                      Finally, there's the economy's ability to repay its debts. Among middle-income economies, the average debt service (all interest and any principal due this year) to exports ratio was 15.4% in 2019-21. For China, it was 9.2%. And, when debt stock is compared to foreign exchange reserves, China's 136.6% average is nearly double the peer group's 72.9%.

                      A final word.
                      One of the great unknowns in understanding China's debt situation is the actual risk associated with debt held by quasi-governmental entities. If the worst scenarios began to unfold, it is entirely likely that the political elite would decide to do whatever it takes to ensure that the problem is addressed as quickly and painlessly as possible.


                      --DOR

                      That's what happened in the United States during various crises, and we shouldn't expect any less from China. More, we should also remind ourselves that China has a very strong ability to fund its own needs.




                      Trust me?
                      I'm an economist!

                      Comment


                      • Originally posted by Zinja View Post
                        (Reuters) - 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 (*ʹվ!) 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."

                        (Additional reporting by Zhou Xin; Editing by Ken Wills)
                        Link
                        in PPP term the list as below:

                        List of countries by GDP (PPP) - Wikipedia

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                        • My 2 fen
                          List of countries ranked by imports paid for at PPP exchange rates: USA, _________ .
                          List of countries ranked by exports denominated at the PPP exchange rate: USA, _______ .
                          List of countries receiving foreign investment denominated at the PPP exchange rate: USA, ________ .
                          List of countries investing out into the world in projects paid for at PPP exchange rates: USA, ________ .
                          List of countries allowing tourists to pay bills at the PPP exchange rate: USA, _________ .

                          (Note: Common practice is to use the dollar as the base unit in PPP calculations. Hence, it is the only currency where the rate is real, not fantasy.)
                          Questions?
                          Trust me?
                          I'm an economist!

                          Comment


                          • Dr. Joeri Schasfoort, has a great Youtube channel on economics. His take China is the worlds second largest economy, but not as large as stated.

                            https://www.youtube.com/watch?v=A5A5Eu0ra3I&t=117s

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