China's $22 trillion time-bomb

[dearone4u_22]

Even IF India was "somehow" to match China's percentage GDP growth rate, our base economy is four times bigger than India's. So we will still be adding four times more to our economy every year, even if the percentage growth rates are the same.

That is even in the best case scenario for India.

But look at the actual results.

BBC News - India's GDP growth falls to 6.1%

Lets me ask you one question since you jump the most when you say china economy is 6 trillion..what does it exactly mean ????
does china have 6 trillion $ in pocket or is the worthiness of all asset in china .....

now what happens to that number when those asset prices like say real estate since it makes a large chunk of your economy starts falling.....does your economy size shrink or its remain as it is ..?????????

 

[Rig Vedic]

True, but the problem is, the capital could be squandered. Also, excess debt in own currency leads to very high inflation, which is triply bad if the public knows about it, but only "regular bad" if you hide it somehow. If the debt increases too much without a corresponding increase in production because it was squandered (for example, if the country creates debt to make a giant paper airplane out of currency) then even meltdown is not out of the question.

Correct, you need to ensure that the capital is used efficiently and leads to greater productivity. If that happens, then there will no inflation.

I think China has some concerns about efficient utilization (e.g. in HSR and commercial real estate) but overall it is manageable.

 

[Punjabbi Munda]

One more prediction of China's collapse from the Indians. I'll add it to the already long list.

Here, read this 2008 article from an Indian "think tank", which predicted the collapse of China during the 2008 Credit Crunch:

The Fall of the Dragon - IDR




Now, four years later in 2012, what is the result? We can all see for ourselves.

BBC News - India's GDP growth falls to 6.1%

India's obsession with the collapse of their neighbours, has ensured that their own dreams of reaching "double-digit growth" have now collapsed.

Perhaps you can google about Chinese economy,China's economy has slowed down more drastically than India's.

 

[dearone4u_22]

According to that logic, America with a $14 trillion GDP is growing faster than India.

In fact, America with 2% growth is adding more to their economy every year than India is.

yes it is ....why do you think every one is looking & praying for recovery in US economy ..... Yours and ours economy need a consumer who is willing to take out his credit card and buy something which he might not require ever...in short a relentless consumer... which chinese and indian can never be cause of our upbringing and social culture..

but prob is not of just 2% ..it is only 2% with all the stimulus and near zero rate ....they are out of bullets to fire ....if something goes wrong now in US ..it will a bullet train without brakes heading toward other economies causing unimaginable devastation....

 

[illusion8]

Chinese economy is much needed for the world, the pump of 4 trillion introduced by China banks in 2008 helped the world recover a bit from a recession. What this article with speculative figures cos the real figures are missing is telling is that India better not follow similar patterns of China. Riding a tiger is the phenomenon - you go very fast in all directions but u cannot get down else u will be killed.

Its just a warning to India to learn from other's mistakes and needs to be considered, before attempting a China model. The tortoise always wins in the end. Excellent examples of mistakes are Japan and Dubai. We all hope China doesn't make an example of itself.

 

[Punjabbi Munda]

Indians always like to claim that India is the "second-fastest growing major economy in the world".

The problem... is that India is only growing at 6.1%.

Meanwhile... Turkey, Argentina, Sri Lanka etc. are all currently growing above 8%+.

Haha that means Turkey,Argentina and Sri Lanka are growing faster than China too!

 

[Chinese-Dragon]

Perhaps you can google about Chinese economy,China's economy has slowed down more drastically than India's.

No it hasn't.

China's growth rate for 2011 was 9.2%, you can check it yourself.

What you're talking about is the 2012 "growth target" set by the Chinese government (7.5%), which was always set at around 7-8% every year for the past decade anyway. We set a low annual growth target so we can easily beat it, and we do in fact beat the target every single year.

India's government on the other hand, sets high targets... and fails to meet them every time.

 

[Punjabbi Munda]

And btw
Turkey is hoping for 4% growth,Argentina and Brazil at 3.6%,don't know about Sri Lanka.
India is still doing decently well compared to others.

 

[WS-10 Engine]

japan slowed down because its a developed country, developed countries dont grow fast unless u have technological breakthroughs.

developing countries can growth fast due to its technological and industrial backwardness.
it can catch up with developed countries through upgrading.
also the fast urbanization rate.

 

[AbhimanyuShrivastav]

Haha that means Turkey,Argentina and Sri Lanka are growing faster than China too!

Dont forget Afghanistan that has grown at an average of 9.1 % since 2003 with last year growth as 8.4%

 

[FairAndUnbiased]

Correct, you need to ensure that the capital is used efficiently and leads to greater productivity. If that happens, then there will no inflation.

I think China has some concerns about efficient utilization (e.g. in HSR and commercial real estate) but overall it is manageable.

commercial real estate is a problem but HSR is definitely not. It was not designed to make money directly; it was designed to make money through stimulating the rest of the economy.

Let me just tell you what I know from experience: before HSR, it was more expensive to ship goods from Beijing to Hong Kong, than from Hong Kong to the US. This was because regular rail was used for passengers and thus the goods mostly were shipped by truck. Most of China's highways are toll roads and tolls can be insanely high, ranging up to thousands of RMB for heavy cargo and long trips. Before HSR, trains and buses were so overcrowded during New Years that accidents happened and people died; I think this year was the first year ever with no fatalities during New Years.

HSR increases labor mobility greatly, increases goods mobility greatly, gives us experience in manufacturing heavy machinery, high quality steel, electronics and systems design which can be applied to other items. It reduces potential carbon emissions as well.

I cannot stress how important high labor mobility is to a major economy. It not only means that people can live further from work which reduces urban crowding, but also stimulates tourism and reduces the burden of migrant workers.

 

[Punjabbi Munda]

No it hasn't.

China's growth rate for 2011 was 9.2%, you can check it yourself.

What you're talking about is the 2012 "growth target" set by the Chinese government, which was always set at around 7-8% every year for the past decade anyway. We set a low annual growth target so we can easily beat it, and we do in fact beat the target every single year.

India's government on the other hand, at the beginning of this financial year they were boasting about how they will certainly grow at 9% this year. But we all know the results, they fail their targets every time.

Yes,your government sets low growth targets.
But this is the first time that affects are already being seen,the imports to exports ratio has risen(imports increased/exports decreased),seeing China is an export based economy,not a good news.
Meanwhile Indian exports increased to 8 month high and IIP also increased(Industrial output),so we have showed signs of recovery already.
True that the CPC sets a low growth target,but these indications weren't seen before:
Asia stocks mixed amid doubts about China growth - BusinessWeek
Let the new data come out

And btw,CPC has never set a low target of 7.5%..this year its something special

 

[Rig Vedic]

commercial real estate is a problem but HSR is definitely not. It was not designed to make money directly; it was designed to make money through stimulating the rest of the economy.

Let me just tell you what I know from experience: before HSR, it was more expensive to ship goods from Beijing to Hong Kong, than from Hong Kong to the US. This was because regular rail was used for passengers and thus the goods mostly were shipped by truck. Most of China's highways are toll roads and tolls can be insanely high, ranging up to thousands of RMB for heavy cargo and long trips. Before HSR, trains and buses were so overcrowded during New Years that accidents happened and people died; I think this year was the first year ever with no fatalities during New Years.

HSR increases labor mobility greatly, increases goods mobility greatly, gives us experience in manufacturing heavy machinery, high quality steel, electronics and systems design which can be applied to other items. It reduces potential carbon emissions as well.

I cannot stress how important high labor mobility is to a major economy. It not only means that people can live further from work which reduces urban crowding, but also stimulates tourism and reduces the burden of migrant workers.

OK, so now passengers are on HSR which frees up the old tracks for use as a freight corridor.

That makes sense.

But I think the same economic advantage could have been achieved at much lower cost if the passenger tracks were designed for 200 kmph instead of 300 kmph.

Also, for long distances (more than 1000 km) the effort should be to make air travel more affordable.

 

[WS-10 Engine]

yes it is ....why do you think every one is looking & praying for recovery in US economy ..... Yours and ours economy need a consumer who is willing to take out his credit card and buy something which he might not require ever...in short a relentless consumer... which chinese and indian can never be cause of our upbringing and social culture..

but prob is not of just 2% ..it is only 2% with all the stimulus and near zero rate ....they are out of bullets to fire ....if something goes wrong now in US ..it will a bullet train without brakes heading toward other economies causing unimaginable devastation....

china is now the 3rd largest consumer market.

and u have to separate consumption into goods consumption and services consumption.
america is a huge services consumer, from health care, tourism, movies, education, insurance, etc.

china is a producer of goods, so what matters to china is the amounts of goods america consumes. not services.

china is already the 1st or 2nd largest consumer market in many goods, such as automobiles, mobile phones, smartphones, PCs, tablets, home appliances, furniture, machinery, electronics, apparel, and luxury.

chinese domestic consumer market is taking up the slack from US consumers.

china also has consumers in emerging markets for its exports, which have huge populations which make up for the low per capita income.

 

[manofwar]

I am beginning to think that the Chinese members here are obsessed with India..
Instead of defending their country by discussing how this method is not accurate they are just highlighting faults with the Indian economic system.
I am not saying our systems do not have faults, but tell me what good will highlighting India's falling growth rate do to help China's economy and the troubles it faces, raised by the article?