Posted on 12/18/2005 6:09:15 AM PST by snowsislander
BEIJING: China is likely to declare itself the world’s fourth largest economy next week, having leapfrogged Italy, France and Britain, helped by a likely huge revision of its gross domestic product figures. Economists say the National Bureau of Statistics (NBS), which is due to release part of the results of its first national economic census on December 20, is likely to put a much bigger figure on the size of China’s services sector.
The South China Morning Post, citing unnamed economists, reported on Tuesday that the agency would probably revise GDP by as much as $300bn, or about 20% of 2004 output. A revision of that magnitude could catapult China from the world’s seventh-largest economy into fourth spot, now occupied by Britain.
Jim O’Neill, chief global economist at Goldman Sachs in London, said China could attain that status even without such a big revision based on growth rates and currency changes in 2005.
Not only has China grown far more quickly than Italy, France and Britain this year, but the yuan has risen about 2.5% against the dollar, further boosting its output when measured in dollars. The euro and sterling, by contrast, have fallen.
“China could squeak in ahead of Britain even without a revision,” O’Neill said. “It just goes to show how much it’s contributing to the world economy.”
Economists said an upward revision of 20%, as reported by the Hong Kong-based South China Morning Post, would be in line with their own estimates – or could even be too modest.
Chen Xingdong, chief China economist for BNP Paribas Peregrine in Beijing, said he would not be surprised if the NBS revised up its estimate of China’s GDP, which totalled $1.65tn in 2004, by 15% to 20%.
China’s number-crunchers have failed to capture the boom in small and medium-sized industrial enterprises, Chen said. “We always argue that it has been largely underestimated for a long, long time,” he said. “Even a number like 15% is not that large for us.”
Dong Tao, chief economist for non-Japan Asia at Credit Suisse First Boston (Hong Kong) Ltd, said China’s GDP would still be understated even if it was revised up by $300bn.
“There’s a massive under-reporting of GDP in the service sector,” Tao said.
He cited the relatively low quality of data collection in China as one reason for that. Economists have long pointed to shortcomings in China’s statistics, due to a central planning legacy that put priority on collecting data on the production of physical goods from state-owned enterprises.
Tao said another reason was that many service enterprises fall through the statisticians’ net because they fail to report income for tax reasons. “Just take a walk into any restaurant in Shenzhen or Beijing. If you buy a meal without asking for the receipt, for tax reasons these things will not be in China’s GDP,” he said.
Still, Tao said that, on CSFB’s calculation, China would probably need another year before it could catch up with Britain, whose GDP totalled $2.14tn in 2004, according to the World Bank.
France came fifth in the World Bank’s rankings, with 2004 GDP of $2.00tn, and Italy sixth, with output of $1.67tn. The US, followed by Japan and Germany, topped the list. – Reuters
However, the United States can be far richer than it is today. Unshackle our corporations from excessive taxation and bureaucracy and we can be far wealther than we even are today.
The United States is also not done expanding. I expect that the provinces of Canada will join the United States at some point along with Mexico, Cuba, Puerto Rico, Phillipines, New Zealand and Australia, among others.
This will give us a land mass and natural resources far exceeding any other country in the world with a total population that will make us very comparable with China in that area. In fact, if China continues it's "one child per family" policy, our population will eventually surpass that of China.
Thanks for sorting me out. Silly fool that I am- I thought the fact that China was a communist country had something to do with it.
well, you're partially correct, but communism's effect on China's economy is debatable at best -- you must remember that China was on an economic backslide right from the 18th century and this was exacerbated by murderous civil wars from the 1850s right up to 1949 and a genocidal enemy (Japan). Then, China had to recover. Mao's idiocy didn't help things at all. But the question remains -- how can an elephant dance like a 110 lb ballerina (Think Singapore or Hong Kong). Britain had 2 centuries of plundering from it's colonies + the gains of it's industrial revolution. Compare China or India to Britain of the early 1800s and you have the right comparison.
Right, then after we make contact, we can then say this is the greatest solar system...in the Universe...
I believe the US will be much better off in the future than today. But I believe it will be a result of ever increasing ethical conduct placed on the corporations. Much of the bureaucracy shouldered by the corporations is a result of a tug of war between those who want greater corporate latitude and those who want greater government regulation. That won't go away and will always be there. The best thing to hope for is that society in the future is ethical enough to balance the two so that corporations are free to expand while at the same time product safety is sufficiently addressed.
The United States is also not done expanding. I expect that the provinces of Canada will join the United States at some point along with Mexico, Cuba, Puerto Rico, Philippines, New Zealand and Australia, among others..
Puerto Rico is already part of the United States. I can't really say yay or nay as to weather the other countries will join the US but I'm not opposed to it. I think making all of North America and all of South America into one big country wouldn't be a bad idea either. But I doubt any of those countries will go for it.
This will give us a land mass and natural resources far exceeding any other country in the world with a total population that will make us very comparable with China in that area. In fact, if China continues it's "one child per family" policy, our population will eventually surpass that of China.
If those other countries join the US, the population of the US could exceed that of China by the end of the century, given the higher birthrates of all those countries mentioned and China’s current lower birthrate. Though, I doubt they will join, I don’t see any trends in that direction. But even if they don’t join, the US population is expected to grow considerably during the 21st century. Optimistic projections put the US population at well over 500 million by 2050. And with lower birthrates in Europe (some countries will actually shrink), the US population is expected to have as many people as the entire 25 nation European Union by 2050. So, even if the US doesn’t surpass China or India in population during the 21st century, it’s position as the third largest country, in terms of population, is secure.
"Great point. I'll add the free city-states of Hong Kong prior to Britain's profound mistake, and Singapore, or even the more hierarchical regime of Taiwan"
You do realize that Singapore is still a dictatorship and that Taiwan's strongest economic growth periods are when it was a dictatorship under the KMT??? :)
People often mistake growth in economy with freedom and democracy, it isn't necessarily so. What IS necessary, is low government intervention (i.e. less regulatory laws) AND strong rule of law (court system, less corruption).
Oh yeah, prior to 1990's, Hong Kong isn't a democracy either. It's a colony, a subject of the British empire.
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