Author: mychina

China will have 5 times the GDP of America by 2020 [Copy link] 中文

Rank: 6Rank: 6

Post time 2010-12-31 02:54:53 |Display all floors
mychina, you're missing one important point: Chinese economy has a diffrent structure than US-economy. There are two main points that you've missed:

1. 23 percent of China's GDP are produced for exports (as Chinaimport already stated) - and these 23 percent will just drop away.
2. Nearly 60 percent (according to UBS securities estimates) of China's GDP come from the real estate sector - thus they are made through the real estate bubble. If you allow Chinese to invest abroad (that's what you'd basically do if you let the yuan float freely), the bubble will burst and China's GDP would actually be smaller.

But most important of all: the Chinese yuan isn't that cheap compared to it's market value. When you look at purchasing power parities, you'll find that the yuan is maybe 40 percent undervalued - but not, as you've stated, like 86 percent... so even if the two upper constraints wouldn't show up, China's GDP would be still smaller than the USA's.
However, there's a reason why Chinese government keeps the yuan cheap. Trust them - they've got excellent experts there in Beijing :)

Anyway, most important of all, you should consider Chinese people's situation: how are they living? When you see, how much the average Chinese worker earns, you'll soon figure out that there is a lot to catch up...

Currently, Chinese economy is rather unfair: Chinese produce 5 trillion Dollars, but 2,4 trillion Dollars are profits of foreign companies that flow abroad. The 1,3 billion Chinese have to live with the other half. And a big part of that other half belongs to a view rich Chinese (China now has more millionaires than many European countries!). That's a rather unsatisfying situation...

Use magic tools Report

Rank: 1

Post time 2010-12-31 09:36:47 |Display all floors
At the moment, the Chinese yuan is terribly undervalued

China need to carry on and keep on the regular life of its 1.3billion population, that is really a taugh project.
<a href=""></a>, pack yr China Trip.

Use magic tools Report

Rank: 8Rank: 8

Post time 2010-12-31 11:27:47 |Display all floors

Reply #22 Everynowhere's post

WAKE up! Joe!

American Regime knows that ENERGY, Services, technology consumption has a big input on final GDP!
It spend money and blood to control the most useful energy on earth - crude oil in the Arab land- Mesopotamia region!
For China to be 5X USA, it needs to use at least 4 to 5X more energy than USA, it needs to consumer 4 - 5x more technological intensive items (or high value added products) and it needs to develop 4-5x more high value added services!

Alas, now China uses only 1.1X more than the American Empire!
Chinese citizens cannot afford or don't have the knowhow to develop the technological rich items or those services needed!


Happy New Year
Have a roaring 2011....

Green DRagon
Game Master

Use magic tools Report

You can't reply post until you log in Log in | register

Contact us:Tel: (86)010-84883548, Email:
Blog announcement:| We reserve the right, and you authorize us, to use content, including words, photos and videos, which you provide to our blog
platform, for non-profit purposes on China Daily media, comprising newspaper, website, iPad and other social media accounts.