China Is the Driver of World Economic Growth, as Even the IMF Admits

[beijingwalker]

China Is the Driver of World Economic Growth, as Even the IMF Admits
Jan. 12, 2017 (EIRNS)—The Chinese word for "economy" means "for society to prosper and benefit the people," today’s Global Times explains. That this is the organizing principle of the Chinese economy can be seen in both domestic and global terms, when looking back at last year.

According to the International Monetary Fund, China contributed 39% of world economic growth last year, a rise of 14.2% from the year before. In addition to indicating the directionality of China’s economy, this is, of course, an extraordinary marker of the economic collapse of the trans-Atlantic economies.

According to Chinese figures, 12.49 million jobs were created in cities and townships last year, while 10 million people overcame poverty. For 2017, the article predicts that China "will inject into the world economy ’Chinese dividends’ that are full of hope." It previews that at the 19th National Congress of the Communist Party of China later this year, policymakers "will formulate and implement some major policy measures." China will have the opportunity this year, through its leadership and participation in various international fora, such as the BRICS summit, Davos, etc., to work with other countries "to promote the building of a shared destiny and the recovery of the world economy."

 

[Dungeness]

China Is the Driver of World Economic Growth, as Even the IMF Admits
Jan. 12, 2017 (EIRNS)—The Chinese word for "economy" means "for society to prosper and benefit the people," today’s Global Times explains. That this is the organizing principle of the Chinese economy can be seen in both domestic and global terms, when looking back at last year.

According to the International Monetary Fund, China contributed 39% of world economic growth last year, a rise of 14.2% from the year before. In addition to indicating the directionality of China’s economy, this is, of course, an extraordinary marker of the economic collapse of the trans-Atlantic economies.

According to Chinese figures, 12.49 million jobs were created in cities and townships last year, while 10 million people overcame poverty. For 2017, the article predicts that China "will inject into the world economy ’Chinese dividends’ that are full of hope." It previews that at the 19th National Congress of the Communist Party of China later this year, policymakers "will formulate and implement some major policy measures." China will have the opportunity this year, through its leadership and participation in various international fora, such as the BRICS summit, Davos, etc., to work with other countries "to promote the building of a shared destiny and the recovery of the world economy."

Only a couple of years ago, there was a mood of "Move over, China" all over the supapowa, and they thought they could be THE engine of world economic growth.

 

[Huan]

Only a couple of years ago, there was a mood of "Move over, China" all over the supapowa, and they thought they could be THE engine of world economic growth.

Not a surprise that China is winning out since she has these important fundamentals altogether in my opinion:
1. A very large consumer base from her billion+ domestic population.
2. A monopoly over Rare Earth Metals and raw materials supply for manufacturing.
3. A gigantic manufacturing infrastructure with an established network of suppliers inside the country.
4. A very effective CCP governance system to implement Five-Year Plans in a timely manner.
5. Large land size for continuous infrastructure projects and investments.

 

[52051]

Only a couple of years ago, there was a mood of "Move over, China" all over the supapowa, and they thought they could be THE engine of world economic growth.

Many races from hot region tend to act like that, they are simply very easy to be over exciting and celebrating on trivial things and being very good at dreaming far beyond their means, it is a combintation of both genetics and culture.

But to the outsiders of their culture cycle, people usually find its ridulus and funny, this article summarize this type of mentality very well:

The spirit of India's people has already made it a superpower
http://www.telegraph.co.uk/comment/...-people-has-already-made-it-a-superpower.html

 

[schoolboy]

Not a surprise that China is winning out since she has these important fundamentals altogether in my opinion:
1. A very large consumer base from her billion+ domestic population.
2. A monopoly over Rare Earth Metals and raw materials supply for manufacturing.
3. A gigantic manufacturing infrastructure with an established network of suppliers inside the country.
4. A very effective CCP governance system to implement Five-Year Plans in a timely manner.
5. Large land size for continuous infrastructure projects and investments.

Great points - it summarises my thoughts as well

So far China has been used as a manufacturing hub for exports, due to its labour cost advantage. But there's also a huge domestic consumer demand that can fuel the manufacturing even when export demands slow.

 

[DoTell]

Great points - it summarises my thoughts as well

So far China has been used as a manufacturing hub for exports, due to its labour cost advantage. But there's also a huge domestic consumer demand that can fuel the manufacturing even when export demands slow.

This is such a cliche and an over simplified statement. We are where we are simply because we have cheap labors. The quality of our workforce, our planing, our vision have nothing to do with it. That's why whichever country has low labor cost that country has become a manufacturer power house, right?

 

[Naara-e-Mastana]

Great points - it summarises my thoughts as well

So far China has been used as a manufacturing hub for exports, due to its labour cost advantage. But there's also a huge domestic consumer demand that can fuel the manufacturing even when export demands slow.

Disagree . they have a clear vision , "skilled labour" , least corrupt society ( unlike us southasian ) & most importantly they have will to become manufacturing hub .

 

[Shotgunner51]

Not a surprise that China is winning out since she has these important fundamentals altogether in my opinion:
1. A very large consumer base from her billion+ domestic population.
2. A monopoly over Rare Earth Metals and raw materials supply for manufacturing.
3. A gigantic manufacturing infrastructure with an established network of suppliers inside the country.
4. A very effective CCP governance system to implement Five-Year Plans in a timely manner.
5. Large land size for continuous infrastructure projects and investments.

6. Broad-based education and a large base of technicians with vocational skills
7. Effective IUR (Industry-University-Research Institute) system that propel scientific/engineering R&D
8. Ultra-high savings rate, low consumption
9. Well developed infrastructure
10. State-led in heavy industries (all SOE), free market competition in POE-led industrial sectors
11. MIC runs almost in autarky mode, fully state-owned, and tightly governed defence expenditure
12. Strong identification of culture (Middle Kingdom), collectivism (team spirit), and patriotism
13. A manipulated currency hence ......
Well the last one, please ignore it cos it's "subjective", let politicians decide.

 

[Kyoto]

China is 'winning' compared to India because it is the largest homogenous nation. China has almost always been the centrally planned Han state that it is (apart from the frontier provinces). South Asia, Middle East and Africa full of more artificial countries that are made from colonial territories and not based on ethnolinguistic groups. This is why China, Korea and Japan have been so successful because they have more unity and are more mature countries in terms of historic leadership.

 

[schoolboy]

This is such a cliche and an over simplified statement. We are where we are simply because we have cheap labors. The quality of our workforce, our planing, our vision have nothing to do with it. That's why whichever country has low labor cost that country has become a manufacturer power house, right?

Well, at the time when its manufacturing boom began China had nothing the US and Western countries do not already have - except cheap labour.

It was intended to be a low-cost factory that replaced the factory line labor force of the west , producing goods for export. Today there is also a huge domestic market for those goods and that will sustain the manufacturing boom - as demand lags in the West.

Workforce may be relatively better quality today than in the past but that was not a reason why western companies invested in making factories in China originally.

 

[DoTell]

Well, at the time when its manufacturing boom began China had nothing the US and Western countries do not already have - except cheap labour.

It .

You can say that to many other countries including your own. Why hasn't it happened in those countries? We knew our strength, took the opportunity and ran with it. It's called winners find ways to win, losers find excuses to lose.

 

[schoolboy]

You can say that to many other countries including your own. Why hasn't it happened in those countries? We knew our strength, took the opportunity and ran with it. It's called winners find ways to win, losers find excuses to lose.

Gosh, you're fishing for compliments so desperately. And to think I gave you one.

My post - if you read it again - is nothing about the reason why China was more attractive than other poor countries. It was simply an economic explanation for the phenomenon of manufacturing shifting there from rich countries.

As to why China, not India, while most of Huan's points 2-5 are relevant, the answer is largely governance - but not in a flattering way. From a business perspective the absence of any competing power centres besides the party, lack of strong labour laws, low possibility of court cases, easier way to get local governments to cooperate and lack of transparency in dealings make China attractive to westerners - same bunch who ironically then voice concern over human rights issues.

 

[terranMarine]

Cheap labor is just only one aspect of it (nothing more to it as other poor countries also have cheap labor such as Vietnam, India, Mexico etc..) The fact China is the Driver of the world economic growth is because China has all the elements to qualify sitting at the Driver's seat leading the world to peaceful development, sustainable economic growth, making the world environmental friendly by pushing for renewable energy expansion, trying to help people lift out of poverty. On the other hand what does the Yankees do? Instead of acting like a responsible power it has been waging wars most of the time since the creation of the USA.

 

[DoTell]

Gosh, you're fishing for compliments so desperately. And to think I gave you one.

My post - if you read it again - is nothing about the reason why China was more attractive than other poor countries. It was simply an economic explanation for the phenomenon of manufacturing shifting there from rich countries.

As to why China, not India, while most of Huan's points 2-5 are relevant, the answer is largely governance - but not in a flattering way. From a business perspective the absence of any competing power centres besides the party, lack of strong labour laws, low possibility of court cases, easier way to get local governments to cooperate and lack of transparency in dealings make China attractive to westerners - same bunch who ironically then voice concern over human rights issues.

For the past 30+ years, people outside China have been made believe that we give a crap about how they think of us. The fact is the exact opposite is true. I was just pointing out the flaws in the propaganda that somehow China is strong now simply because we were poor. That's all. Trust me, the last thing I want is getting some "compliments" from the likes of you. And please don't be so predictable my Indian friend. Always bring up the "freedom" card when you lose an argument. Tell me, how free are you guys? Do you not have to go to work, pay your bills? Can you get away with robbery? Oh you can "elect" your leaders. And how has that worked out for you in the last 60+ years?

 

[TaiShang]

So far China has been used as a manufacturing hub for exports

Wrong.

Export to GDP.

due to its labour cost advantage.

If labor cost were effective, India would have surpassed China by now. Your labor is worthless for the most part. And your rate of labor participation is very low.

Yet, your export to GDP ratio is already declining without any meaningful industrial capacity or innovation coming from India.

Export to GDP.

Cheap labor did not help India even a bit. Your GDP has plateaud, as well.

Lesson from your schooling: There are more to being a manufacturing powerhouse than cheap labor.

From a business perspective the absence of any competing power centres besides the party, lack of strong labour laws, low possibility of court cases, easier way to get local governments to cooperate and lack of transparency in dealings make China attractive to westerners - same bunch who ironically then voice concern over human rights issues.

India scores much lower on all indexes related human development. For some reason, Western companies did not invest in India.

Besides, do you know from where the overwhelming FDI to China come? Since the 90s, US cumulative investment in China is around 250 billion USD. Investment to Mainland mostly came from Greater China region.

Indian corruption, inefficiency, lack of logistics, dysfunctional democracy in Indian characteristics, illiterate and low-quality workforce, bad environment, dirtiness... all played a role in your lack of development and attractiveness.