'China to Replace US as the Engine for World Economy'

The Peoples Daily (China) ^ | 10.26.02

[desertcry]

No surprise here. With the labor unions running the country(through the democrat party), it woun't take 5 years for China to surpass the USA as the leading economic power.

[dwills]

we need another economic force that can pay some of the world's frieght in terms of aid and peace, while we focus on exporting the cultural products that are admired world-wide

do you expect that other developed nations will ever migrate toward chinese as their second language of choice or to watching their films and listening to their music, buying their software etc?

[habs4ever]

This so absurd that I can't even find the energy to go through this clowns ideas point by point.The US will be the top dog today, 10 years from now, 25 years from now and up until I leave this mortal coil.

[Dialup Llama]

>Optimists look on the bright side. Those aren't examples of looking on the bright side.

Optimists have been buying on dips for the past three years.

[Dialup Llama]

Jim Rogers also said that Africa was going to become the place to invest due to its young demographics. Guess he was wrong on that pick.

[Southack]

"Optimists have been buying on dips for the past three years."

Indeed. And those of us who have been doing so with real-estate have greatly expanded our fortunes.

Good luck to you, as well.

[AdamSelene235]

Yet you seem to be betting that today's drop will be more severe.

I'll take what I can get.

And your position certainly betrays your claim to be an optimist, btw!

When you butted in, I was arguing with a fellow who believed that 99% of the world's population needed to die in order for civilization to survive! So yeah, I'm a wee bit more optimistic than he is.

Why, do you want to be known as Atom Selene 235, as in the old Japanese lunar landing project Selene, or just that 235 is the end of your nickname?

Adam (not Atom...put the So-Co down and rub your eyes) Selene..The first man combined with the greek moon goddess..The name was already taken so I tacked on an easily remembered 235 to distinguish it. From Heinlein's classic:

[AdamSelene235]

Jim Rogers also said that Africa was going to become the place to invest due to its young demographics. Guess he was wrong on that pick.

Specifically, he was bullish on Botswana. And if I invested in Africa, that would be my first choice. He's since changed his mind, btw.

[Sonny M]

I think china is slowly moving more towards the pinochet model in some respects. It will be a facist state, with power, but in this case its looking to build its economy around manufacturing, which will provide it with jobs, creating wealth for its people, who will then be able to spend it, on chinese made products. The problems that they have and even the chinese admit this, is that they do not create or innovate. They do not invent. They can claim no advantage over intellectual properties or ideas or products. Untill they move towards creatitivity, they will be a source of cheap labor. As america moves more towards a service oriented economy (which is what we essentially have now). China will be the labor. This can't be good for them or us in the long run, especially when cheap labor is easy to replace, while creative visionary's are not. I wish the USA would actually look to fast tracking and moving ahead with our patenting department and FDA. The chinese don't even get the concept of benefiting from your own invention.

[virgil]

Slavery is typical of agrarian societies. If you want to be an industrial society, that makes quality products,slavery must go. I think thats the problem with Chinese products. The quality sucks. Their's is some of the worst stuff. As a consumer, I have to complain about quality because so much stuff that is made available to us is made in China. Alternatives can be hard to find at a reasonable price. If China wants to make quality products, they'll have to set higher standards, raise the pay of their slaves and perhaps make them into stakeholders. If they don't then they'll just be another Asian tiger that will go bust.

[Revel]

"Long-term problems include
inadequate investment in economic infrastructure, rapidly rising medical and pension costs of an aging
population, sizable trade deficits, and stagnation of family income in the lower economic groups. "

Of course....and I think you can attribute most of these things above to the government and there supidity/lust for power.

[formosaplastics]

There's as much R&D going on in China these days as the U.S. China is producing more science Ph.D's as well. Probably half of US Ph. D candidates are foreign-born, too. In regard to slave labor, Harry Wu, who is the expert on this issue, says that at any one time China has about 8 mil. people in its "laogai" prison system. In a country of 1.2 bil., 8 mil. is a miniscule percentage. 8 mil. slave laborers along can't hardly be responsible for China's $4-5 tril. economy. China has cheap labor, but cheap labor isn't necessarily slave labor.

[staytrue]

I see a lot of second hand speculation about China on FR. Perhaps you could post Rogers observations as a separate article.

[formosaplastics]

Today's Third World republics are theoretically "free," but their economies are nonetheless lagging China's.

[formosaplastics]

Japan, S. Korea, Taiwan, Singapore, etc. all started out in the 1960's with "cheap labor" and shoddy products and one-party governments as well, but eventually they got rich, better-educated, made high-quality products, and even adopted multi-party democracy. On the other hand, the majority of people living in India today are still poor and illiterate after 50 years of democracy. Recently, a Toshiba executive commented that there was no difference in quality between a laptop made in China and one made in Japan.

[formosaplastics]

China today is like America 100 years ago. 100 years ago, America wasn't even considered any kind of superpower, let alone power. England, Germany, Austria-Hungary, Russia, and France were considered the most powerful countries at that time. America, along with Japan, was an "up and comer" or "emerging market." But in 100 years' time, America surpassed all these other countries. In history, countries can play musical chairs in terms of being a superpower or not.

Superpower status is a function of economics. Economics is a function of population size, for the most part. Here is a table of countries, their population sizes, and their GDP's:

USA: 285 mil., $10 tril.
Japan: 130 mil., $4.8 tril.
Germany: 80 mil., $1.8 tril.
England: 60 mil., $1.2 tril.
France: 60 mil., $1.2 tril.

In general, the more people a country has, the bigger its economy can be. The more people a country has, the more economic output it can produce and, among other things, the bigger a military it can afford.

China today has an economy of about $5 tril. It's already the second largest economy in the world. It's per-capita GDP is $4,000. In China's 10 richest cities, with a total population of 100 mil., per-capita GDP is $16,000, which is on par with Taiwan and S. Korea.

100 mil. people is almost as big as Japan's entire population or the number of people in America who actually have daily jobs.

20 years ago, there were fewer than 10 mil. people in China with a $16,000 per-capita GDP. Today, it's 100 mil. Over the next 20 years, it'll likely be 200-300 mil. And by that time China's overall GDP will be bigger than America's as well.

20 years ago, over 90% of China's population was agrarian, but now just 67% or so. By 2020, that figure will probably fall under 50%. That means over 700 mil. city dwellers, the richest 200-300 mil. of which will have First World living standards. 200-300 mil. will be bigger than Japan's entire population and almost as big as America's population. And then after 2020, China has the rest of the century to advance even further.

By 2020, many Fortune 500 companies will be getting more revenues from China than the US itself! The other day, Intel announced that mainland China has become its second-biggest source of revenue in the entire world after the US itself.

China is already the #1 market in the world for cell phones, light bulbs, refridgerators, air conditioners, elevators, and #2 in PC's and computer chips.

Can America really go to war with a country which is the main source of its own companies' revenues without shooting itself in the foot?

In addition, every car maker in the world knows right now that China is the world's fastest-growing market for cars. By 2020, they predict China will be #1. Incidentally, they also predict that by 2020, all cars will be driven by fuel cells. Recently, Honda even announced it would make 18 different fuel-cell powered car models by 2005.

[DoctorMichael]

China has cheap labor, but cheap labor isn't necessarily slave labor.

Agreed. "Slave" labor may have been used too generally here.

Nonetheless, the PRC seems to have imported only those aspects of a Free-market that suit those in power, which therefore is not a Free market at all. I think we can both agree that the "collusion of government and business to the exclusion of the people" is a good working definition of a Facist State. For a Free Market to work efficiently the people, both the owners of the stores, shops and factories AND those that work in those businesses, the laborers, must be free to choose (see FREE TO CHOOSE by Nobel prize-winning Economist, Milton Friedman). When both sides of this equation are allowed to act and react freely towards one another is when the Market will work most efficiently.

Currently in China "The Communist Party" does not allow the free association of the people in ANY organization that is outside, and not sanctioned by, the Communist Party itself. There is coersion of the people that are caught in the grip of a group of individuals that meet in private to decide the fate of the country at a sea-side resort. From the Chinese Communist Party control over the "State-run" Catholic churches, to the placement of relatives in the newly created businesses, in a type of hereditary-succession, "The Party" does not want to give up its ultimate control of the country.

"Solidarity" in Poland was the result of the free-association of workers. The formation of an independent trade union in a communist country that did not allow any such group to be formed unless sanctioned by The Party was revolutionary. It was an alternate expression of the revolutionary "will-of-the-people" versus that sanction wholely claimed by "The Party" itself. I am still waiting for the formation of a single independent labor union in China that is not controlled ultimately by the Communist Party.

Yes, I understand China is changing, and any change involves dislocation and pain. Yes, the Communist rulers there, ever nervous over any hint of chaos and loss of control, are also allowing, and are responsible for, THAT verysame change. I have read that "The Party" is even beginning to allow the input of business leaders in the economic decisions that were once solely made by "The Party". These changes ARE good. But it would be better if the people had some input. In some respects the workers may as well be slaves.

Yes, this is a time of transition and things that were true yesterday may rapidly become false tomorrow, so rapid is the change. Still, my final comment then is half-jokingly directed at the people in China: "Workers of China unite. You have nothing to lose but your chains".

[Annakin]

India is a democratic constitutional republic, whereas China is a slave labor mongering, Communist, totalitarian state.

Which one would you rather support in order to help preserve our own way of life?

[Annakin]

India has the largest and most highly educated middle class in the world - almost 200 million strong. Get your facts straight, son.

[AdamSelene235]

I see a lot of second hand speculation about China on FR. Perhaps you could post Rogers observations as a separate article.

Rogers cranks one out about every 2 months or so and I post them regularly. You can find his recent stuff at www.jimrogers.com. Check the articles section.

The movie entilted "War" in the Angola directory is also worth watching.