How can CHina catch up with the West when its hands are tied?

bladerunner said:

Friedman may not be a economist, but some do work for his organisation.

These real economic analysts you talk about also predicted Japan to surpass America, look what happened and how many predicted this current financial crisis :nana:

China has a lot of underlying problems internally as well as externally which could hinder its progress.

attempts to create a reserve currency and move away from the american one hasn't gained a lot of traction.

Attempts to acquire a bigger shareholding in Rio Tinto failed

A Backlash against Chinese presence in Papua New Guinea, underlies a hostility towards a Chinese presence, this may well extend to Africa where some negotiations have stalled or been retracted. and hasnt their been calls for the copper deal with one large African country to be cancelled?

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lol. Some predictions about Japan went wrong in the past so this one will go wrong as well ? What kind of argument is that ? How about something smarter like pointing out what's wrong with the current prediction instead ?

You expect the reserve currency issue to be resolved overnight like monopoly money ? lol Even when small individual businesses make plans/investments, the time-frame involved easily go for years let alone an issue with worldwide effects like the reserve currency.
Businesses & international relations have up & downs all the time. Just do a google of financial news you'll find setbacks, delays & cancellations all the time.
How about looking at the overall trend of China in these areas ? Cherry picking won't get you far.

bladerunner said:

Geeez.... for christ sake You asked the question on how Friedman arrived at that figure when stating his countries wealth, to which I replied, by adding a nations assets,and resources, at market value which are subject to change. One does'nt go around randomly changing the accepted procedures for determining a country's wealth because they don't suit one's line of thinking.
I never said 50 Trillion was close to 300 Trillion. I said $50 Trillion was the starting point from which you continue to add the other assets of the nation. but to note these assets are subject to daily changes, so logically you may not arrive at the same figure as Friedman. Now why is that so hard to understand?.
Evaluating a countrys wealth provides snapshop on the over all position of the country.
Friedman is a nobody when it comes to the tin tacks of economics and has been proven embarrassingly wrong ( a point I acknowledged at the bottom of post 31)The reason why I mentioned him is , he voices views still held by many Americans, while it may be a surprise to you I am sceptical on most of his opinions. It doesn't mean to say his sources are wrong, its what interpretation he places on them.

IMO Friedman looks outside the square and puts a different perspective on things.
His book "The Next Hundred Years" could be worth a read, if only for the fact that he sees America as still being the Top dog for a long time, like hundreds of yrs, and where's China? well nowhere in fact he reckons it would follow its history and fragment itself over the next 100yrs.
Geography would prevent itself from becoming a world power. To the West the mountains and deserts to the North Siberia, to the East the pacific. Whereas America has easy access to the Atlantic and Pacific. If you can follow that logic.

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It is idiots like Friedman who can never predict what happened in 2009.

Reviews from Amazon. The guy is at best, a fantasist with a bad track record. As one said, "Hari Seldon he is not".

"George Friedman coauthored a book in 1991 titled "The Coming War with Japan."

"And finally, the author argues that, in the mid-21st century, Japan will initiate a war with the United States by launching moon rocks from its secretive lunar bases at the three U.S. Battlestars that monitor the planet from space. (I kid you not.)"

"And finally, the author argues that, in the mid-21st century, Japan will initiate a war with the United States by launching moon rocks from its secretive lunar bases at the three U.S. Battlestars that monitor the planet from space. (I kid you not.)" Now that's funny.

By the way the different that I can see between China verse Japan and Korea is that there are areas that Japan and Korea could not venture into after their have fully developed their economy around electronic and automotive industries. While China is now venturing into commercial aerospace, satellite GPS development, high speed rail and telecommunication technology after they have successfully ventured into electronics, household appliances, automotive, global arm sales and global finance industries.

Also China can channel resources into what ever high tech research it can and like to perform with less outside influence then Japan and Korea. This allows China to continue to expend it economy and research which help to maintain decent employment for it's engineers and scientists. Doesn't mean China will be successful in all areas but at least China have a choice to venture into anything it like to get into and that represent another chance to develop a profitable and successful new industry.

The reason China can continuing to grow so fast is because its GDP per capita, cost of labor, and cost of living is so low. The universal economic theory is for nations with lower GDP per capita to gradually approach the GDP per capita of developed nations over the next 50 years, given internal stability and the requisite infrastructure. China can follow the path of Korea, Japan, Hong Kong, Singapore, and Taiwan. Even if China's GDP per capita reached the same level as Taiwan's, which is the lowest of the 5, then its economy will still be significantly larger than the US. Unlike those nations, China is also one of the most well-endowed nations in the world in terms of natural resources, having the richest proven mineral deposits in the world, as well as ample coal reserves, the world's greatest hydroelectric potential, and among the world's greatest wind power potential. Coupled with the massive investment in infrastructure the CCP has made, the world's largest foreign reserves, and a stable internal environment, there is no reason to believe China's economy would halt its expansion any time in the foreseeable future.

FriedRiceNSpice said:

The reason China can continuing to grow so fast is because its GDP per capita, cost of labor, and cost of living is so low. The universal economic theory is for nations with lower GDP per capita to gradually approach the GDP per capita of developed nations over the next 50 years, given internal stability and the requisite infrastructure. China can follow the path of Korea, Japan, Hong Kong, Singapore, and Taiwan. Even if China's GDP per capita reached the same level as Taiwan's, which is the lowest of the 5, then its economy will still be significantly larger than the US. Unlike those nations, China is also one of the most well-endowed nations in the world in terms of natural resources, having the richest proven mineral deposits in the world, as well as ample coal reserves, the world's greatest hydroelectric potential, and among the world's greatest wind power potential. Coupled with the massive investment in infrastructure the CCP has made, the world's largest foreign reserves, and a stable internal environment, there is no reason to believe China's economy would halt its expansion any time in the foreseeable future.

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Does your argument presuppose China to remain a net exporter?

What happens in the future when China might no longer be a net exporter of goods? Either because domestic consumption has out striped exports, or the rest of the world has shut out china's manufacturing?

FriedRiceNSpice said:

The reason China can continuing to grow so fast is because its GDP per capita, cost of labor, and cost of living is so low. The universal economic theory is for nations with lower GDP per capita to gradually approach the GDP per capita of developed nations over the next 50 years, given internal stability and the requisite infrastructure. China can follow the path of Korea, Japan, Hong Kong, Singapore, and Taiwan. Even if China's GDP per capita reached the same level as Taiwan's, which is the lowest of the 5, then its economy will still be significantly larger than the US. Unlike those nations, China is also one of the most well-endowed nations in the world in terms of natural resources, having the richest proven mineral deposits in the world, as well as ample coal reserves, the world's greatest hydroelectric potential, and among the world's greatest wind power potential. Coupled with the massive investment in infrastructure the CCP has made, the world's largest foreign reserves, and a stable internal environment, there is no reason to believe China's economy would halt its expansion any time in the foreseeable future.

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Plus China is beholden to no one. Japan was politicaly dependent on US and when US demand Yen to rise Japan has no alternative but to follow.

Suddenly Japanese product become twice as expensive overnight forcing thousand of mom and pop industry to close or relocate to other Asian Country . In the intervening year Japn show remarkable progress to climb the value chain, but the rise of Japan is effectively stopped and the debacle and speculation in the 80's put the last nail in the Japanese rise.

She never recover in remain in "lost decade until now"

Japan depend on overseas market and no domestic resources to speak except electricity and people. See how she suffered more than China today.
In the coming years 400 million people will be relocated to the Urban center and they all need to be housed, fed, schooled, transported . So the proverbial "Bridge to nowhere will never happened in China" The whole western development will provide work and market for industrial product for decades!

So there is big difference between China and Japan

Schumacher said:

lol. How about something smarter like pointing out what's wrong with the current prediction instead ?

Cherry picking won't get you far.

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I never suggested that China would'nt have the biggest economy at some stage the raw numbers suggest the inevitability of it happening its just the time frame I'm questioning and besides, I do not believe that the USA is going to become a economic basket case as some of these forum members suggest.
Some of the stumbling blocks that could prevent China from becoming the largest economy in the stated time , involve, environmental degradation, water and Geo Politics, the discussion of which is prohibited on this forum.
Besides I wanted to check up on a few items before continuing, also cmb=68 has pre-empted me by posing the question on post 59.
However adding to that question, some economists suggest, that despite developing its internal markets, things could turn decidedly tricky for China unless the West resumes importing in large numbers from China again as its internal market is still rather limited.
Much has been made of China exporting to the third world, but that sector is becoming the hardest hit. Since the start of this crisis direct investment by the Ist world has fallen by a trillion dollars to around $300 billion, now is China going to step in and replace that amount of money every year.
I note with interest there has been much talk of China being economically decoupled from the West but events would suggest otherwise. Meanwhile I'm looking forward to an advertised program by the BBC, evaluating China's possible capability or contribution in helping the world get out of this mess.
Meanwhile I consider China to be comparable to where Amercia was in 1947 in economic development. In 1947 America with a GDP of $234.3 Billion ( the person on this site got his info from U.S. Department of Commerce, National Income and Product Accounts) virtually bailed out the World with its Marshall Plan. Now I wonder what China can do with its 4 Trillion plus.

crobato said:

It is idiots like Friedman who can never predict what happened in 2009.

Reviews from Amazon. The guy is at best, a fantasist with a bad track record. As one said, "Hari Seldon he is not".

"George Friedman coauthored a book in 1991 titled "The Coming War with Japan."

"And finally, the author argues that, in the mid-21st century, Japan will initiate a war with the United States by launching moon rocks from its secretive lunar bases at the three U.S. Battlestars that monitor the planet from space. (I kid you not.)"

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I did acknowledge Friedman's credibility in my earlier posts and even looking at his promos on tube, one cant help but feel that the guys out of touch, but we shouldn't let that detract from the fact that he is voicing an opinion that America may not become a economic basket case, even reading between the lines in walkers interview with 60minutes, suggests that provided America takes preventative action, this situation can be avoided.
The steps that America may take to remedy its precarious situation, may adversely affect China's economic progress.

Japan never really had a shot to surpass the US in terms of overall nominal GDP. To do so, it would've had to achieve a GDP per capita of roughly 2.5 times that of the US, which would drive labor costs and cost of living so high that its industries would no longer be competitive. Furthermore, Japan has to import nearly all of its natural resources, whereas the US and China both have booming primary industrial sectors. The thing is, going by raw numbers China can surpass the US with only a quarter of the US's GDP per capita, which is still only the same level of Mexico, Russia, or Turkey. The great thing about China's growth is that it is across the board, from primary industries such as mining to the service sector. Although exports is still the most critical part of the Chinese economy today, retail (indicator of domestic consumption) growth has been far outpacing export growth in the last 2-3 years. This is a trend that is only expected to continue. Hendrik's assessment is completely correct- the ultimate engine of Chinese economic growth is the massive urbanization taking place today- an urban migration on a scale that has been unprecedented in human history.

Yes, hits to the export sector and the current global economic slump will adversely affect the Chinese economy. However, in the larger scheme of things, as long as China can maintain a relative level of stability, it will continue to grow into the world's largest economy. On another note- there is no reason to expect for the average Chinese to be wealthier than the average American any time in the next half century. Its simply a matter of land, geography, population, resources, and the massive differences in wealth between the two nations today.

Here is an article on the the increasing role of domestic consumption in the Chinese economy:

After a quick scan of the thread, I think I should add a few notes for your consideration.

China's economy should no longer simply be measured by activity within its borders as overseas earnings are now making a considerable contribution to GDP.

Likewise the extent of Chinese influence is also extending, projecting deep into Asia and creating openings into the Indian Ocean which is changing quite fundamentally the way it is able to configure its trade, its trade lines and its hubs.

Irrespective of what the actual figures turn out to be, growth in China has shown itself to be secure at rates able to double the size of the economy each decade at a time when major Western economies are unquestionably caught in a prolonged period of economic stagnation which will last at the very least ten years if not more than twenty. (Remember a Car Crash happens in seconds, but hospitalisation can take years!!)

Very soon China will be the worlds second largest economy measured by exchange rates and the only major economy still enjoying significant growth and with substantial surpluses and reserves at its disposal. These things are money magnets and attract investment and expertise, especially in R&D which is wholly dependant on cash rich doners in order to survive.

In this way you will see a continued and rapid enhancement of China's technology, esp military technology, which will ensure that it is able to meet its 2049 objective of creating a wholly modern army capable of fighting local wars under conditions of informationalisation (determined at the appropriate 2049 measure of such a capability) compared to major western forces which look likely to remain significantly unchanged from what they have today for another generation.