BEIJING: For once, Chinese economists working with state-run institutions are not thinking on the same lines. The issue is a big one: will China surpass Japan to become the worlds second largest economy by 2009 end?
Li Daokui, director of Tsinghua Universitys Center for China in the World Economy, sent hopes soaring among local economy watchers when he said that the countrys gross domestic product will outpace that of Japan by year end. He feels the Japanese economy is still struck in recession while the economic decline in China has now stopped and a new momentum is building up.
He caused quite a bit of surprise because there is still a difference of 13 per cent between Japans industrial output and that of China. Li is obviously betting on expectation held by some that Japan will come up with another bout of 15 per cent negative growth.
Lis prediction is also based on figures released by Zhang Liqun, an analyst for macro economy with the Development Research Center in the State Council, which is the Chinese cabinet. Zhang recently said China has passed the low point of 6.1 per cent GDP growth seen in the first quarter of 2009 and is now on the path to recovery.
Recent months has seen significant boost in consumption, increased investment volume, and manageable decline in export growth, all of which signal a revival in the overall business outlook for China, Zhang said.
Lis optimistic projections have been challenged by Liu Junhong, an expert with the state-run China Institutes of Contemporary International Relations. The Japanese economy has shown improvement since March and may be really not as bad as it appears to some observers, he said. It is possible Japan will do much better in the second quarter as compared to the first quarter of 2009 and keep itself ahead of China, Liu said.
An important variable is the exchange rate for the Yen and the Chinese Renminbi. The big question is whether the Yen would continue to slip as it did in the past months. The Chinese currency has remained stable this year. If the Yen continues to slide sharply against the United States dollar, there is a possibility that the Chinese economy would outpace that of Japan, analysts said.
But that seems unlikely given the recent trend of a recovering Yen, which has climbed back to 94 to a dollar after slipping badly for weeks. At one stage, the Yen had reached 100 to a dollar.
Li Daokui, director of Tsinghua Universitys Center for China in the World Economy, sent hopes soaring among local economy watchers when he said that the countrys gross domestic product will outpace that of Japan by year end. He feels the Japanese economy is still struck in recession while the economic decline in China has now stopped and a new momentum is building up.
He caused quite a bit of surprise because there is still a difference of 13 per cent between Japans industrial output and that of China. Li is obviously betting on expectation held by some that Japan will come up with another bout of 15 per cent negative growth.
Lis prediction is also based on figures released by Zhang Liqun, an analyst for macro economy with the Development Research Center in the State Council, which is the Chinese cabinet. Zhang recently said China has passed the low point of 6.1 per cent GDP growth seen in the first quarter of 2009 and is now on the path to recovery.
Recent months has seen significant boost in consumption, increased investment volume, and manageable decline in export growth, all of which signal a revival in the overall business outlook for China, Zhang said.
Lis optimistic projections have been challenged by Liu Junhong, an expert with the state-run China Institutes of Contemporary International Relations. The Japanese economy has shown improvement since March and may be really not as bad as it appears to some observers, he said. It is possible Japan will do much better in the second quarter as compared to the first quarter of 2009 and keep itself ahead of China, Liu said.
An important variable is the exchange rate for the Yen and the Chinese Renminbi. The big question is whether the Yen would continue to slip as it did in the past months. The Chinese currency has remained stable this year. If the Yen continues to slide sharply against the United States dollar, there is a possibility that the Chinese economy would outpace that of Japan, analysts said.
But that seems unlikely given the recent trend of a recovering Yen, which has climbed back to 94 to a dollar after slipping badly for weeks. At one stage, the Yen had reached 100 to a dollar.
