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China on path to surpass US economically by 2025
The Financial Express ^ | 2/10/2005

Posted on 02/10/2005 10:59:58 AM PST by robowombat

China on path to surpass US economically by 2025

2/10/2005

WASHINGTON, Feb 9 (Reuters): China's unprecedented rise, fuelled by foreign investment and technology, has put the Asian giant on a path to surpass the United States economically by 2025, the author of a new book on China said Tuesday.

US pressure on Chinese authorities to revalue the yuan currency will bring only a brief respite from the fusion of cheap-but-skilled labor, imported technology and economies of scale that make China so competitive, said Oded Shenkar.

His book "The Chinese Century," represents neither a "China-bashing book" nor the 1980s "Japan as Number One genre", the Ohio State University business management professor said.

"The rise of China is a watershed," Shenkar told Reuters in an interview. "I compare it to the rise of the United States in the late 19th century." Britain, the leading power of that era, did not take its former American colony seriously despite the geopolitical implications of the US. emergence. China aims to regain the world pre-eminence it had before the modern era, he said.

More than becoming a new Japan, "China will be overtaking the United States between 2020 and 2025," Shenkar said.

The Israeli-born researcher said he put China's emergence as the world economic power about two decades earlier than most analysts by measuring purchasing power rather than nominal figures to measure output and growth. "I believe first of all that the Chinese economy is actually larger than the numbers would suggest," he said.

Although he expects an eventual modest revaluation of China's currency, Shenkar said lobbying China to alter the yuan's decade-old peg to the dollar would not help much. "Pressure on not only currency rates, but also tariffs and quotas will have only a temporary effect," he said, citing the case of Japan's dramatic revaluation in the late 1980s. "What you are going to do if you revalue the currency, is lower their costs of importation," he said. To cope with competition from China, the US government must improve education in science, while American negotiators must drive harder bargains on counterfeiting, said Shenkar.

"In intellectual property rights (IPR), the Chinese continue to play games," he said, describing celebrated crackdowns that never seem to put Chinese counterfeiters out of business. "Most people still think of IPR violations in terms of bootlegging of DVDs," he said. "The reality is this is happening across the board," he said, citing fake machinery, shampoo and medicine that cause billions of dollars of losses.

A major theme of Shenkar's book is how technology transfers have helped China catch up to US competitors at low cost.


TOPICS: Business/Economy; Foreign Affairs; Government; News/Current Events
KEYWORDS: china; globalism; japanredo
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Mostly Prof Sheker pushing his new book "The Chinese Century". I remain sceptical of these straight line analysis and think the Chinese have designed an economy full of debt overhang. That doesn't mean the PRC will not be a dangerous adversary in a decade or so. In part because the Chinese 'miracle' economy may hit a number of sharp bumps and a belligerant Han nationalist foreign policy would be useful to divert the masses from their woes.
1 posted on 02/10/2005 10:59:58 AM PST by robowombat
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To: robowombat

Maybe in sheer volume, but certainly not in service and/or quality of product.


2 posted on 02/10/2005 11:01:56 AM PST by roaddog727 (The marginal propensity to save is 1 minus the marginal propensity to consume.)
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To: robowombat

Just like Japan did. :(


3 posted on 02/10/2005 11:02:15 AM PST by Darkwolf377 ("Of the four wars in my lifetime none came about because the U.S. was too strong."-Ronald Reagan)
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To: robowombat

Hmmm, I remember Japan's economy was going to surpass ours in the 80's.


4 posted on 02/10/2005 11:02:37 AM PST by GunnyHartman (Allah is allah outta virgins.)
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To: Darkwolf377

And Germany & India & France...yawn


5 posted on 02/10/2005 11:03:25 AM PST by pissant
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To: GunnyHartman

I think Japans economy passed our twice, going up and coming down


6 posted on 02/10/2005 11:04:59 AM PST by SF Republican
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To: robowombat

When you break down the GDP to a per capita basis, they are still in deep poverty as individual citizens.


7 posted on 02/10/2005 11:05:16 AM PST by TommyDale
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To: SF Republican

Hehe...


8 posted on 02/10/2005 11:06:12 AM PST by RockinRight (It's NOT too early to start talking about 2006...or 2008.)
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To: roaddog727

They are already "bigger" in many aspects...have been for a long time...


9 posted on 02/10/2005 11:07:10 AM PST by maui_hawaii
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To: roaddog727
Maybe in sheer volume, but certainly not in service and/or quality of product.

You could be right. That achievement may take an additional 5 or 10 years.

10 posted on 02/10/2005 11:07:20 AM PST by newgeezer (Just my opinion, of course. Your mileage may vary.)
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To: robowombat
""I believe first of all that the Chinese economy is actually larger than the numbers would suggest," he said."

Well, I believe the corrupt book cooking is actually much larger than has been speculated.

11 posted on 02/10/2005 11:08:18 AM PST by monkeywrench
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To: robowombat

With our retarded tax code, our crappy parenting, and the abysmal youth work ethic, this might not be so far from reality.


12 posted on 02/10/2005 11:12:26 AM PST by teenyelliott (Soilent green is made of liberals...)
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To: pissant

I believe back in the late 1950's, Nikita Kruschev said the USSR would pass the US economically too. How did he put it? "We will bury you."


13 posted on 02/10/2005 11:13:34 AM PST by GeorgiaMike
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To: roaddog727
China will have internal issues a long time before 2025, IMHO. Namely, it will have to rationalize its system of private enterprise with its system of centralized political control. Because that system of internal political control must limit its ability to allow its people to interact with free people, it will limit its people's ability to communicate on economic as well as political matters.

Let's put it this way: "Can China overtake more prosperous countries without bragging about it? And if it brags about it, how will it explain to its people why they still have to eat dirt?"


14 posted on 02/10/2005 11:13:35 AM PST by conservatism_IS_compassion (The idea around which liberalism coheres is that NOTHING actually matters but PR.)
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To: newgeezer

"You could be right. That achievement may take an additional 5 or 10 years."

In a Quid Pro Quo situation, certainly - but this is not Quid Pro Quo.

They are playing catchup and improve. We are playing develope new and hand off.


15 posted on 02/10/2005 11:13:54 AM PST by roaddog727 (The marginal propensity to save is 1 minus the marginal propensity to consume.)
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To: GunnyHartman

Quote: Hmmm, I remember Japan's economy was going to surpass ours in the 80's


I read an articl about the rise of Japan in the '80's and the rise of China now and you cannot comapre the two in any way. Can't remember all the details but here are a few:

You cannot compare what is happening with China as what happened with Japan in the 80's. China has a very low wages which makes their products very cheap to buy. Japan's wages were comparable to ours at the time which caused market forces to even out in the end. Japan's form of gov't mirroed ours as well as trade laws at the time vs the communist chinese gov't..

I also remember when Japan was going strong in the 80's and buying US companies they KEPT the companies employees employeed in the US. Today american companies are bending over backwards to shut down their plants in the us and ship the jobs to china.

Also like the article said, china has zero respct for intellectual right and do not play by the rules. Japan did.


16 posted on 02/10/2005 11:16:08 AM PST by superiorslots
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To: GeorgiaMike
"We will bury you."

I wonder if his Russian made, poor quality shoe survived the table banging as he said this?

17 posted on 02/10/2005 11:20:18 AM PST by Mark17
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To: superiorslots

Were we not brainwashed into thinking over the last 10 years that once the chinese economy was taking off we would be exporting huge anounts of goods and services to fill their needs?????? If you don't know what we export to china is a pittance.

Never happened and never will because the chinese only looking out for numero uno and that is not the US. I do not truxt them and never will.


18 posted on 02/10/2005 11:20:53 AM PST by superiorslots
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To: robowombat

No question that China will eventually become an economic power - even more than it already is - but there are many intangibles in both an economy and a society that China is not even close to emulating (corruption, communism, totalitarianism, bribary, lack of property rights, bad government).

Yeah, I guess anyone could make a 50 or 100 year prediction, although it's kinda like throwing darts, really.

(


19 posted on 02/10/2005 11:30:11 AM PST by Obadiah
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To: GunnyHartman
Hmmm, I remember Japan's economy was going to surpass ours in the 80's.

yeah - I remember that too - but a funny thing happened on the way.. :o)

20 posted on 02/10/2005 11:35:09 AM PST by maine-iac7 (...but you can't fool all of the people all of the time." Lincoln)
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