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NEW YORK (CNNMoney.com) -- China is likely to soon overtake Japan to become the world's second largest economy, a milestone that will only fuel growing fears about the economic might of the world's largest country.
China's economy grew by 8.7% in 2009, even in the face of a global economic slowdown. Japan, which will report its full-year numbers on Feb. 14, is expected to slip behind China due to the steep decline in its economy in the first half of last year.
Both China and Japan are likely to end the year with a gross domestic product, the broadest measure of economic activity, of just over $5 trillion. To put that in context, that's only a little more than a third of the size of the U.S. economy.
But with its huge population edge on the United States, many economists believe it is inevitable that China will eventually overtake the United States -- even if it takes another 20 or 30 years.
There are signs of a developing asset bubble in China's housing and equity markets. China's banking system has been dogged by questions about its transparency. There is also a dependence on exports that are supported by the government's manipulation of the currency and limits on population growth.
All were factors in Japan's troubles over of the last two decades.
The last year shows one of the problems with a country whose economy is greatly export driven. When the global recession hit, China's exports were not spared, and it took about $586 billion in government spending, to fill the gap.
That turned out to be a much bigger share of China's GDP than all the various bailouts and stimulus packages in the United States.
It has only made us the richest, most technologically advanced human population in the history of the Earth, in half a decade.I don't see how moving into a consumption economy will somehow make them better off, it certainly hasn't helped us at all.
From what I've read, China's economy lacks a solid core: a healthy consumer base. If China cannot successfully transform from an export to a consumption economy, it may collapse. As a majority of the country is still run by centralized planning through the communist party, we shall see if the bureaucracy can make the necessary adaptations in time.
I don't see how moving into a consumption economy will somehow make them better off, it certainly hasn't helped us at all.
I don't see how moving into a consumption economy will somehow make them better off, it certainly hasn't helped us at all.
Because without domestic consumption, the Chinese economy is almost entirely dependent on the flows of the global economy.
I don't see how moving into a consumption economy will somehow make them better off, it certainly hasn't helped us at all.
Because without domestic consumption, the Chinese economy is almost entirely dependent on the flows of the global economy.
Oh I agree that they should start consuming more of the things that they produce, but they'd have to quit buying up our debt for that. But to say that they should move completely into a consumption economy is a bit ridiculous.
Because without domestic consumption, the Chinese economy is almost entirely dependent on the flows of the global economy.
Oh I agree that they should start consuming more of the things that they produce, but they'd have to quit buying up our debt for that. But to say that they should move completely into a consumption economy is a bit ridiculous.
He's not saving they should stop saving and investing. He's saying that they need to increase their consumption.
There are tremendous imbalances in the Chinese economy, and one day it will burst, and burst badly. That does not mean that China's long-term growth will be derailed. America had many booms and busts when it was a developing nation in the 19th century. China will too, and it is coming.
There are tremendous imbalances in the Chinese economy, and one day it will burst, and burst badly. That does not mean that China's long-term growth will be derailed. America had many booms and busts when it was a developing nation in the 19th century. China will too, and it is coming.
So you believe a burst will happen, but not on the measure of the "Lost Decade" like Japan?
There are tremendous imbalances in the Chinese economy, and one day it will burst, and burst badly. That does not mean that China's long-term growth will be derailed. America had many booms and busts when it was a developing nation in the 19th century. China will too, and it is coming.
So you believe a burst will happen, but not on the measure of the "Lost Decade" like Japan?
If a bust happens in China then whether or not it's comparable to the Lost Decade depends on how they react to that bust. If they try to stimulate their way out of it then they'll be in it for the long haul.
So you believe a burst will happen, but not on the measure of the "Lost Decade" like Japan?
If a bust happens in China then whether or not it's comparable to the Lost Decade depends on how they react to that bust. If they try to stimulate their way out of it then they'll be in it for the long haul.
The joy of ideology unfettered by the chains of reality.
It has only made us the richest, most technologically advanced human population in the history of the Earth, in half a decade.I don't see how moving into a consumption economy will somehow make them better off, it certainly hasn't helped us at all.
I really THINK we are. At least where the money still is.
Interesting though Japanese kids get better video games faster than American kids. THEIR fathers must be doing something right.
Soon they'll get better cars.
Then they'll get better satellites.
Then a better military.
Granted, this is changed, because others are finally catching up. But the fact that they had to catch up has to tell you something...It has only made us the richest, most technologically advanced human population in the history of the Earth, in half a decade.
I seriously doubt we are still the most tech advanced. israel, japan, etc would top us i bet.
We still are the richest nation in the world, home to the greatest number of massive corporations producing the most amazing tech the world has ever seen.I really THINK we are. At least where the money still is.
You trying to start a flame war? Xbox360>Playstation, and I don't own either!Interesting though Japanese kids get better video games faster than American kids. THEIR fathers must be doing something right.
