China at No. 1 -- already

[DesiGuy]

(CNN) -- As this interactive from CNNMoney shows, the U.S. is still by far the world's largest economy, despite the Great Recession and tepid recovery.

But China is coming on strong, passing Japan as the world's second largest economy and predictions that sometime in the next 10 to 15 years it will eclipse the U.S., too.

Some think it's already happened. A Pew Research Center poll last year found that 44 percent of Americans already thought China had become the world's number one economic power. Only 27 percent knew that the U.S. economy is still on top, nearly three times the size of China.

Still, there are several areas where China has already taken the mantle from the U.S. China has become the world's largest car market, a symbolic transition after the recession left Detroit in shambles. But some may not know that before cars, Chinese beer drinkers passed U.S. as top consumers in 2002, and now knock back nearly a quarter of all beer produced in the world.

Beijing is aiming to steer its economy away from exports toward domestic consumption -- and, in doing so, will inevitably supplant the U.S. as the top market destination for consumer goods.

"We expect China will overtake the U.S. as the largest consumer market in 2020," Fan Cheuk Wan, head of research for Credit Suisse Asia Pacific, told CNN.

If so, China will reach its goal of having half its GDP generated by domestic consumption in the next 10 years; currently about 33 percent of China's economy comes from domestic spending, Wan said.

"China cannot rely on the indebted consumers in the developed economies any more as a key growth engine in the next decade," Wan said.

China at No. 1 -- already - CNN.com

 

[luckyyy]

the difference is that US has made more friends then china....

and with it's friends and allies , US will remain number one..

 

[ChineseTiger1986]

the difference is that US has made more friends then china....

and with it's friends and allies , US will remain number one..

Are you sure?

China has many friendly nations in Middle East, Africa and Latin America. In Asia it has Pakistan, Myanmar, Cambodia, Laos, etc.

 

[DesiGuy]

China doesn't have as many as diplomats US have.

 

[ChineseTiger1986]

China doesn't have as many as diplomats US have.

It doesn't matter, having more diplomats in many other countries it doesn't mean they would like you.

 

[Martian2]

the difference is that US has made more friends then china....

and with it's friends and allies , US will remain number one..

Where were the American "friends and allies" at the G-20?

19 To 1 At G-20 - Investors.com

"19 To 1 At G-20
Posted 11/11/2010 07:08 PM ET

Economics: The G-20 meeting in Seoul to create a new global economic order looks a lot like a rugby scrum, all arms and legs and little clear direction. Yet on one thing the leaders agree: The crisis is largely America's fault.

A couple of headlines show what we mean: "Obama Under Fire At G-20 Summit" (Agence France Presse) and "Obama Flies Into Storm Of Criticism At Seoul Summit," (the Sydney Morning Herald).

Why the anti-U.S. tone? Sure, legitimate gripes can be made about the Fed's renewed $600 billion quantitative easing plan to boost U.S. demand and weaken the dollar. And those who fault the U.S. for its massive debt buildup and trillion-dollar deficits will get no disagreement from us. Both policies are economically unwise.

That said, the idea that the rest of the world has innocently stood by over the last decade of financial turmoil while the U.S. messed things up doesn't stand up to scrutiny.

Take China and Germany. Both have followed policies that push up exports at the expense of imports and domestic demand. In 2009, the two countries accounted for 19% of the world's $12 trillion in exports.

The other G-20 countries run big trade deficits and want Germany and China to "rebalance" their economies. Such requests have so far been met with a polite "no thanks" at the G-20.

China in particular is following the same foolish mercantilist policy Japan did 40 years ago — focusing on boosting exports at all costs by undervaluing its currency and building foreign reserves.

Yes, GDP growth in China has averaged over 10% for more than a decade. But because of the frugality China has forced on its citizens, the savings rate approaches 50% — an unhealthy level that leaves little room for buying other nations' goods. So resentment is building.

Meanwhile, U.S. critics in Europe, the G-20's largest bloc of nations, are no less hypocritical. While insulting U.S. fiscal profligacy, their own finances are a bleeding mess — far worse, statistically, than even ours. And that's saying a lot.

In 2009, U.S. public debt as a share of GDP was 53%. In Britain, it was 68%, in Germany 72%, in France 78% and in Italy 115%. In Japan, the debt-to-GDP ratio is at bankruptcy levels: 190%.

True, some brave, bold moves have been made recently, especially in France, Germany and Britain, where political leaders have cut spending to regain control of their public finances. But that doesn't change the fact that plenty of economic policy mistakes have been made around the globe and we're all paying for them now.

These problems aren't easily resolved. G-20 watchers who keep hoping for a "grand bargain" — a deal on currencies, or trade deficits, or government spending, or whatever, that will somehow solve all our problems — are going to be disappointed.

The answer isn't in collective action, or in blaming the U.S. It lies in sound economic principles followed by each nation. These include lower taxes, smaller government, fewer regulations, freer trade, and a respect for private property and rule of law.

A commitment by the nations gathered in Seoul to return to those principles would do more than any deal on currencies or trade deficits to strengthen the world's economy."

My observation:

Fact: "Yuan has risen by almost 25% against the dollar." Five years ago, the exchange rate was 8.26 yuans for 1 U.S. dollar. Today, the exchange rate is 6.62 yuans per U.S. dollar. (See http://imarketnews.com/node/22294)

Conclusion: The American claim that China is manipulating its currency for an unfair trade advantage is clearly untrue. To the contrary, China's currency appreciation of 25% during the past five years has placed China's manufacturers at a disadvantage in the world market.

Actually, it is the United States that has been manipulating its currency for an unfair trade advantage. The Federal Reserve has been printing money at an unbelievable rate. The first round of "Quantitative Easing" involved $2 trillion dollars during the Great Recession.

Today, the Federal Reserve is engaged in a second round of massive money printing of $600 billion dollars, called "Quantitative Easing 2." Flooding the world with a total of $2.6 trillion dollars of printed money will devalue the American currency. This is currency manipulation. There is no other way to describe it.

 

[StingRoy]

What we are witnessing (vis-a-vis US and China)... looks to be what we saw of US and USSR back in the 70s.
Hysteria amongst the Americans.

 

[siegecrossbow]

China doesn't have as many as diplomats US have.

Unfortunately force, not diplomacy, tends to be used as a first resort.

 

[prototype]

the G-20 seems more like a currency war going on,between all the nation's

definitely U.S is to blame here,with those huge deficit financing and piling debts it can do more damage than it can think to the world economy.

I dont consider an export depend business as a solution,but actually a wise spending

American's spend money like water with those plastic currencies,absorbing everything at the cost of debt,and sub prime crises was evidence what happen's thereafter

 

[DesiGuy]

Unfortunately force, not diplomacy, tends to be used as a first resort.

I think it depends on who you are dealing with and circumstances.

 

[luckyyy]

...........

the only problum the US has , is that they look at the problum from opposie side..
exchange rate or trade deficits are not problums but they are the end result of the problum..

the main problum is..

FED printing more money ,banks are landing more money to their costomers , customers spending this money at the wall-mart , wall-mart importing more chines goods..

if you import more , exchange rate will change and trade deficits will rise...

the simple and most logical solution is....spend wisely inplace of use & throw , buy quality and use for long time....why there is a compulsion to buy the latest every next month..

 

[Hafizzz]

the difference is that US has made more friends then china....

and with it's friends and allies , US will remain number one..

LOL.

Almost every countries out there hate the USA !!!