Posted on 12/30/2002 6:50:36 AM PST by Lake
Last updated at: (Beijing Time) Monday, December 30, 2002China's GDP Hit 1.23 Trillion US Dollars in 2002: NBSChina's economic growth in 2002 is expected to reach 8 percent, Director of the National Bureau of Statistics (NBS) Zhu Zhixin said Monday. Zhu told reporters in Beijing that this year's gross domestic product (GDP) hit 1.02 trillion yuan (about 123.2 billion US dollars), making a historical breakthrough. |
| China's economic growth in 2002 is expected to reach 8 percent, Director of the National Bureau of Statistics (NBS) Zhu Zhixin said on Monday. Zhu told reporters in Beijing that this year's gross domestic product (GDP) hit 10.2 trillion yuan (about 1.23 trillion US dollars), setting a new record. During the past year, China achieved rapid progress in agricultural structural readjustment, industrial production, investment, consumption, foreign trade and people's incomes, said Zhu. Statistics show that China's farming industry maintained stable growth in 2002, with grain production totaling 457.1 million tons,up one percent over the previous year. Agricultural structure was further optimized, with the specialized farming and ecology-friendly farming modes promoted. Zhu said the year 2002 will see the fastest industrial growth of recent years, in which the total added value of the industrial sector will top three trillion yuan (about 362.4 billion US dollars), an increase of 12 percent over last year. Profits earned by industrial enterprises will continue to climb this year, following three successive years of growth, said Zhu, noting that total industrial profits are expected to reach 550 billion yuan this year, an increase of 20 percent. Additionally, state-owned and state-controlled industrial firms will score record annual profits of over 250 billion yuan this year. Both the country's total capital investment and retail sales for 2002 will top four trillion yuan. According to the NBS, houses and cars have become the nation's hot consumer items. In the first eleven months of 2002, sales of homes soared 37.1 percent, and homes sold to private individuals accounted for 90 percent of the total. Sales of automobiles grew 70.6 percent year-on-year. China's total foreign trade volume for 2002 will top 600 billion US dollars, said Zhu, adding that actual foreign direct investment (FDI) will exceed 50 billion US dollars this year. NBS figures indicate that the disposable income of urban residents in 2002 will exceed 7,500 yuan (about 906 US dollars) per capita, up 10 percent compared to last year, and the net income of farmers will reach 2,470 yuan per capita, up 4 percent. The savings deposits of the Chinese people also increased in 2002. By the end of November, total savings deposits had reached 8.57 trillion yuan, 1.2 trillion yuan more than that by the end of last year. Zhu predicted that in 2003, the Chinese economy will be faced with more opportunities than challenges, and the national economy will see continued growth based on this year's progress. |
China's economic growth in 2002 is expected to reach 8 percent, Director of the National Bureau of Statistics (NBS) Zhu Zhixin said on Monday.
Zhu told reporters in Beijing that this year's gross domestic product (GDP) hit 10.2 trillion yuan (about 1.23 trillion US dollars), setting a new record.
So which is it ? I don't believe either number actually as I'm betting they are doing this in an attempt to get more foreign investment.
Independent auditors? We don' need no stinkin' independent auditors!
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China's economic growth in 2002 is expected to reach 8 percent
About a year or so back didn't Forbes Magazine blow these "economic growth" projections for and by the Red Chinese, etc. right out of the water?
See this article on the Chinese 'miracle.'
IS CHINA'S ECONOMIC BOOM A MYTH? The New Republic Online
www.tnr.com/docprem.mhtml?i=20021216&s=kurlantzick121602
See, the Chicoms have claimed the economy is growing around 10% per year for as long as they have been in charge. Taken literally, the economy should have expanded about 170-fold since 1949. It obviously hasn't, when city people earn $900 a year on average and rural people $200, at the current official exchange rate. I mean, they weren't all living on $1.50 a year in 1949.
What is actually going on is the official figures include inflation. They goose the money supply - it is up 3 fold in the last decade and more like 20 fold over the last 25 years. It grew around 14% last year. Then they hold the exchange rate steady, through capital controls and by forbidding free trade in the currency. There is a black market, but it stays pretty close to the official rate (a 5% profit is typical, on a round trip from black to official market), because the difference is set more by the risks run in trading (at a low volume) than by economy wide forces.
Occasionally they have financial crises when the fixed exchange rate can't be maintained. Then they devalue, and "let out" a portion of the domestic inflation they've been suppressing in the meantime. Instead of the currency depreciating 5-10% per year compared to the dollar (which is itself depreciating 2-3% per year compared to goods), they have occasional smashes of 25-50%.
Meanwhile, the balance sheets continue to burgeon and barge with new "deposits" as they allow more and more money creation. But the loans backing those deposits are often dodgy. The state banking system has probably $1 trillion in bad loans, which accumulate over time based on mismatches between real economic values and nominal money funding of this or that project.
Does the real economy grow? Undoubtedly. They have enourmous savings rates, aka the people live on much less output than they can produce. But the full value of those savings are not secured as real capital. Large portions are wasted, in the state sector of the economy in particular, also in soft loans, etc. Population continues to move from the countryside to the cities and they undoubtedly produce more overall when they get there than they did as superfluous labor back on the farms. Construction projects are often boondoogles but do put up developments, even if haphazard ones that repay only a portion of their real economic cost.
But what is the real rate of economic growth? Nobody knows. Including the Chicoms themselves. Something under the 8-12% rates they advertise, and something above 0. You can probably minimize the error (certainly not eliminate it) by estimating perhaps half of it is real economic growth and half just suppressed inflation with no real increase in value, rather than fiat money bubble-blowing. Even that rate of real economic growth probably only dates to the reform period, starting around 1979.
So then you'd expect real growth at ~5% rates for ~25 years, not ~10% rates for ~50 years as the government statistics pretend. Meaning the actual increase in standard of living is on the order of 3 times since they moved away from rigid communism. They may have been somewhat poorer in real terms then than in 1949, and certainly were not very far above subsistence.
From an almost entirely rural population living on $90-130 a year, they would have gone to 10-25% urban living on $275-380 per year. That is still a very poor country. On that assessment, you'd expect it to be 50-75 years before the per capita income is on the order of $5000 - 2-3 generations. By focusing only on urban workers and pretending economic growth is twice as rapid, they are pretending in their forecasts that such a level of wealth is only 25 years off - or one generation.
If they are close to another devaluation or a major financial crisis of some other kind, even that assessment might be generous. Some measures of currency value suggest the yuan ought to be worth only about 60% of its present value. Which would mean past economic growth is only around 3% in real terms, not 5%, that the level attained to date is only around $200-225, and would put that level of wealth somewhere off in the early 22nd century (4-4.5 generations away).
Somewhere between 2 and 5 generations from now, they will attain a middle class standard of wealth, akin to the South Koreas and Taiwans of a decade or so ago. If nothing seriously interfers, of course. They are not remotely at that level yet, and are unlikely to get there significantly faster than that, because the headline numbers are completely bogus. All you have to do is take them literally and project them backwards to see that.
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