IS CHINA'S ECONOMIC BOOM A MYTH?

The New Republic ^ | Issue of 12/16/02 | Joshua Kurlantzick

[formosaplastics]

All countries have a "growth curve." It's just that while Japan, Korea, etc. have hit their "maturity" stage after several decades of fast growth, China is still early in its "exponential" stage.

[formosaplastics]

Japan's economy could never overtake America's because Japan's population is less than half of America's (130 mil. vs. 285 mi.). In order for Japan's GDP to be greater than America's, the Japanese per-capita GDP would have to be around $100,000 per year instead of about $40,000. That just isn't going to happen. On the other hand, China's GDP is not limited by population size. A country's population size/labor pool is a major variable in determining a country's "production possibilities frontier" or maximum GDP potential. The more people a country has, the more economic output it can produce. One would naturally expect that if there are two First World countries and the first has a population of 100 mil. and the second has 50 mil., the first country's GDP would be roughly twice the size of the second's. There are other factors too such as whether or not the country's government implements pro-capitalist economic policies, and China's authoritarian government can clearly more expeditiously enact such policies than messy Third World legislatures can.

[The Pheonix]

Thanks for all your sensible postings (as always)

I ask the doomsayers on this forum, "if China's economy did not collapse EVEN at the worst excesses of the Cultural Revolution (1965-1978), why should it collapse now, when fundamentals are a zillion times better ?" Paul Kennedy, the author of "the rise and fall of Great powers", used statistics to prove that China still had good GDP growth rate even during the height of the Cultural Revolution, when there was a complete breakdown of Law and Order and there was total chaos.

Prediction of the impending collapse of China is nothing new, there were such forcasts during
the 1956,
and 1965,
and 1978,
and 1988,,
and recently as 1993
and 1998

[The Pheonix]

Hear it from the Horses mouths

Want to get some first-hand info about investment in China, ask the CEOs of General Motors, Motorola and GE

The CEO of GM said a week ago that GM's faith in China had been proven correct as GM's car sales hit a whopping 100% increase this year, on a year to year.

Similar sentiments from Motorola and GE

[uglybiker]

Me Chinese

Me pray joke

Me put pee-pee

In your Coke

[crystalk]

Nothing intended to downgrade the worth or value of individual people of Chinese ancestry, especially here in USA, where so many are talented and making a real contribution.

I was talking about the entity of the nation of China, which is always being hugely OVER estimated, and tends to fall on its face.

[MadIvan]

My sister, who lived in Beijing for a year, has constantly told me that China is a lot less stable than it appears. She believes that it is entirely possible that a revolution could break out.

Regards, Ivan

[crystalk]

But Socialism is only an attempt to get [ie steal] some of the kinder, gentler societal aspects resulting from Christianity, on the part of people who don't know Jesus and don't have the Holy Spirit or the Grace of God. And it shows.

When my imitation watch, says its imitation time, it throws imitation pearls, before imitation swine.

PS Jesus says, "I am the only door. If anyone tries to get into the sheep-fold other than by the door, he is a thief and a robber."

[crystalk]

ping

[Delmarksman]

The soup?

[AdamSelene235]

And I didn't say it was NECESSARY, even, for every last spot on earth, but for China, it would be...

So why is Christianity a key part of China's economic policy when it was not NECESSARY for Hong Kong, Japan, or Singapore.

Christianity has some excellent features and still maintains cultural vitality not seen in much of the secular world, but I don't see what it has to do with China's economic growth.

Can recall Jesus discussing monetary policy, infrastructure, etc.

[weikel]

Bump

[TigerLikesRooster]

Re #61

I am doubting that Chinese exponential growth curve is sustainable given all internal and external problems. China is going way too fast with shaky economic institutions. Latin America did have its period of fast growth. Brazil once grew at 15% per year back in 70's. Indonesia grew at decent pace for a while.

When Chinese economy turn sour, it will create the similar situations Indonesia is in now.

[TigerLikesRooster]

Re #61

I am doubting that Chinese exponential growth curve is sustainable given all internal and external problems. China is going way too fast with shaky economic institutions. Latin America did have its period of fast growth. Brazil once grew at 15% per year back in 70's. Indonesia grew at decent pace for a while.

When Chinese economy turns sour, it will create the similar situations Indonesia is in now.

[Acolyte2002]

pepsi losing money? well..maybe we better ask how coke is doing in china or number of new plants builts each year...each game has BOTH winner and losers and yes...WHINERS....america boycotting china at best only temporary setback....people FORGOT there are other markets out there like the new united europe.....the problem with americans is..they think all the action is only on their precious little selves.....if one wants to help/solves china's ills.....positive actions migt be better....no use or need for being hostile with a sleeping giant...only ask for trouble...by the way...if i were a multinational doing WELL in china...WOULD I WANT the world or rivals/competitors (new/potential/existing)to KNOW ABOUTIT? best gauge is if things are TRULY that bad is when we see companies PULLING OUT from china....pepsi is only half hearted effort in china because they divided the pie between themselves...india for pepsi,coke for china......look at john and johnson stock performance if any of you armchair geniuses EVER STEP in china...you will see why companies like jnj is being oh so quiet...they dont EVEN need to spent much on advertising.....

[TigerLikesRooster]

Re #62

The size of population is not the reason Japanese economy crashed in early 90's. There are many countries who boast large population which are still struggling. The reason they do not realize their growth potential is the shaky economic foundation not just as Americans see it, but even as other tiger economy or Japanese economy sees it.

As I said many times, the problem of China is not that it cannot grow to be a major economic power some day but rather that it tries to get there in a really unscrupulous way much like Indonesia did. It tends to ignore its vast territory, diverse ethnic groups, and different regional idiosyncracies.

If you keep at it, what will happen is a painful shakeout.

[Acolyte2002]

WHINERS!!!!! about dying us companies THE ONLY CONSTANT IS CHANGE!!! i dont think anyone here PREFER black and white zenith tv due to love of motherland.....it is said 17 companies of the original dow 30 has already ceased to exist....is that bad?! did/will america get worse? NOT ADAPTING to change is about one of the best DEATH WISH one can hope for... about WHINERS...lots of chinese brands like facial creme of more than decades old also died with china changing/adapting/evolving with the modern world...
those used by mothers/grandmas of decades pass the modern young chinese today refuse to use and PREFER american brands like something as BASIC as pond's facial coldcreme or sunsilk shampoo who dont need to spent much of advertising but more on new plants/warehousing/distribution facilities

literally hundreds of softdrinks brands died under the coke juggernauy..do we see them chinese companies WHININH about foreign devils? also look at eastman kodak stock...china probably is its last refuge for the soon to be obsolete camera film.....being idealistic is good....but being MISGUIDEDLY IGNORANT about it makes things worst especially for everyone concerned......america has been doing great with FREE TRADE all these decades..lets see how closing some doors will make things better or worst....by the way.....other countries/companies/industries would BE HAPPY to fill in ANY VOID left by america in PARTICIPATION of chinese bonanza....if you disagree...ask any us company RESTRICTED by state department from transfer of technology....germans and japanese are way to happy to fill the gap.....with this policy alone where are jobs gained or loss? oday...china has almost 200 million cellphone users....largets market in the world....if that doesnt define/demonstrate to anyone with out colorblind bias/objectivity...nothing will.....

[TigerLikesRooster]

Re #63

There is always a danger when economy or politics goes wrong. This time, the overheated economy with shaky institution and unstable banking system pose the new challenge which can be more serious. The aftermath of such overheated market is even difficult for mature economy like America. It is much tougher for China which is just started to establish its market economy. The developing economy should keep the banking system simple and well in check.

[Acolyte2002]

of course there will ALWAYS BE growing pains.....enforcing/dictating one's own culture/pace of change on another one is misguided if not OUTRIGHT ARROGANCE....newly placed chinese leadership this november has 3 basic legs as vision for the future....one capitalism,two technology,and 3 people's welfare...if we want to improve the conditions of the chinese...work from within...with the EMBRACE of capitalistic materialism and principles...it would be hard for the modern chinese today to have the stomach for war.....everyone is too busy trying to make money......

[Acolyte2002]

some people insist things are the same..the chinese currency is not as convertible.....if a government owned factory has a billion dollar loan to a governemnt bank,both is in trouble right? who loses? with this negative bad loan debt? easy...chinese guvment print 1 billion local currency to make up for the loss...dont worry about deflation.....it aint happening..try to overprice or hoard pr price gouging in china and you might get a bullet in the head