Don't Underestimate China's Economy

[Martian2]

Six years ago, when I started posting on PDF, it was an open question whether China could close the economic gap with the United States.

Today, China's economy is over $10 trillion.

The question has been answered. There is no ambiguity.

China will eventually match the US economically. It may take 10 to 15 years, but it is almost inevitable at this point.

Thus, responding to anti-China posts questioning China's economy is a waste of time.
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China's 2014 economy: $10.4 trillion

Using the more modern SNA 2008 method (instead of the archaic SNA 1993), China's economy has to be revised upward by about 15%.

Under SNA 2008, China's 2014 economy was about $11.5 trillion.

For 2015, assuming 7% growth and 3% inflation, China's economy should be about $12.5 trillion.

There is no way to claim the world's largest growing economy (in absolute terms of $1 trillion) is in trouble economically.

In comparison, the world's second-largest growing economy in absolute terms is the United States.

$17.4 trillion x 4% (2% economic growth + 2% inflation) = $700 billion in economic growth.

 

[TaiShang]

China promoting global economic stability
By Zhang Yugui 2015-9-9

Under the framework of global economic integration, China, as the world's second-largest economy, is paying increasing attention to the spillover effect of its economic and financial policy and is also committed to promoting global economic prosperity and financial stability by maintaining stability and growth at home.

At the G20 meeting of Finance Ministers and Central Bank Governors that concluded over the weekend in Turkey, leaders from G20 countries showed a new degree of concern and interest in China's economy and financial situation. This not only shows the global economy is dependent on China's growth - it also revealed the classic "beggar thy neighbor" mindset of some G20 members.

Japan, as always, found fault with China's policy at the G20 meeting, but this did not prevent China's economic policy and exchange rate reform from gaining wide international support. In fact, Japan has its own economic troubles at home and is not in a position to point fingers at China's economy. Under the impact of "Abenomics," Japan is facing difficulties in returning to its good old days of prosperity.

At the meeting, Zhou Xiaochuan, China's central bank governor, patiently explained the recent developments in China's stock market as well as the yuan exchange rate reform. Zhou oversees the largest volume of forex assets in the world and was fully aware of the key areas of concern from major economies about China's economic development. Therefore, his speech at the G20 meeting struck a powerful counterblow to doom mongers about China's economy, and also convinced his counterparts that China has the ability to stabilize the country's economic growth.

Furthermore, Chinese Finance Minister Lou Jiwei also said at the meeting that China can maintain a growth rate of around 7 percent over the next five years, even amid a period of strategic economic transition. Even if China only saw growth of 6 percent annually in the next five years, it would still be the envy of major global economies.

The meeting recognized the importance of avoiding the false assumption that something that is true for one segment of the economy is true for the economy as a whole, and this is of particular importance when assessing the economic policies of different G20 member countries under the current economic situation. Countries should communicate and coordinate with each other in order to minimize negative spillover effects from their own domestic economic policies and to reduce uncertainty while shaping their policies.

At the meeting, G20 members reached agreement about the need to avoid competitive currency devaluation and to resist all forms of trade protectionism. It showed the G20 countries have increased their awareness of international coordination, even if this consensus may not be observed and put into practice by some economies due to the limitations of the existing G20 mechanism.

Furthermore, China successfully convinced finance ministers and central bankers of other major economies at the meeting that they don't need to worry about China's economic policy. Indeed, the fundamentals of China's economy have remained unchanged. The new method for how the yuan's reference rate is calculated and the currency's depreciation in August signified a step forward for China toward greater liberalization of the exchange rate mechanism.

China's economy is currently in a key phase of shifting to a more advanced model from a growth model based on quantity. Even if the annual growth rate is only 5 percent during the 13th five-year plan period (2016-20), it would be sufficient to allow China's economy to rank above that of the US by 2020. But everyone knows that efficient growth is more important than low-quality and inefficient growth, especially for a large emerging economy like China. Finance would be rootless without support from the real economy, and a strong and advanced manufacturing sector will be the foundation of China's economy.

China's economic policy will have even greater international implications in the future. After China completes its industrialization and builds a sound financial services system, it should not be content with passively accepting the existing rules of the international economic order. Rather it should actively provide public services and products to the world.

In this sense, trans-regional institutions such as the Asian Infrastructure Investment Bank show the efforts of policymakers from emerging countries to escape the strategic shackles of the existing international economic system. By creating and extending a multilateral platform that serves their nations' interests, they aim to eliminate differences through international consensus, dialogue and multilateral agreement, as well as promoting a free flow of commodities and capital and thus gaining benefits through sharing. While actively seeking to get their voices heard internationally, they also try their best to play the role of safeguarding the global economic system. During the process, China must shoulder greater responsibility and strive to maintain global economic and financial stability.

The author is dean of the School of Economics & Finance at Shanghai International Studies University.

 

[mpk1988]

This kind of Panic was expected as China's economy is evolving and entering a new growth phase. I say ignore the naysayers and just do your job. All this hullaballoo is just temporary. China will continue to grow strongly.

 

[IsaacNewton]

good luck china.

 

[xyxmt]

China will only slow down if world stops consuming or if there is another China.

 

[Jlaw]

Repetition makes a certain image of the target in the minds of the gullible. And yes, it is often the gullible that is most needed to pull out a color revolution.

Especially done in a professional manner, repetition works, I guess. There is an entire social-personal psychology behind it. China must study it very carefully and run some social engineering on the target countries. The Black-White race issue in the US would be a nice test zone.

And of course with these idiots please add some misinformation, disinformation along with some truths to confuse them would be good too. @Martian2 Try my suggestion sometimes when you go to those anti China bashing sites!

 

[LowPost]

Welcome back to the forums, Andrew, and thanks for your contributions in the topic, @Martian2, @TaiShang and @Jlaw. I know the Chinese economy isn't 100% at its best right now but I didn't lose my faith in it despite the recent financial volatility.

The words of House Tyrell are "Growing Strong" and this is an appropriate description of China's development in the past decades to the present I think, regardless of what the China collapse theorists may predict.

Don't worry about the anti-China trolls, lads, I, as the Warden of the East, Lord of the Eyrie and Defender of the Vale will sent them all to the Wall once my men catch them so that they won't cause any trouble anymore in the Seven Kingdoms aka PDF. Depending on whether they'll become stewards, builders or rangers of the Night's Watch they'll have to deal with the merciless chilliness of the North and beyond the Wall, hostile wildlings, giants, wights or even White Walkers. Their nature might be unpredictable, yet the Lord Commander, Ser Alliser and Jon Snow will take care of them well. @XiangLong

 

[Aepsilons]

Welcome back to the forums, Andrew, and thanks for your contributions in the topic, @Martian2, @TaiShang and @Jlaw. I know the Chinese economy isn't 100% at its best right now but I didn't lose my faith in it despite the recent financial volatility.

The words of House Tyrell are "Growing Strong" and this is an appropriate description of China's development in the past decades to the present I think, regardless of what the China collapse theorists may predict.

Don't worry about the anti-China trolls, lads, I, as the Warden of the East, Lord of the Eyrie and Defender of the Vale will sent them all to the Wall once my men catch them so that they won't cause any trouble anymore in the Seven Kingdoms aka PDF. Depending on whether they'll become stewards, builders or rangers of the Night's Watch they'll have to deal with the merciless chilliness of the North and beyond the Wall, hostile wildlings, giants, wights or even White Walkers. Their nature might be unpredictable, yet the Lord Commander, Ser Alliser and Jon Snow will take care of them well. @XiangLong

Hahaha you speak with such eloquence when you correlate with GoT euphemism! Lol. Thanks for that post and yes, thanks also for being the "moderate" Chinese poster in PDF.

I mean that. I appreciate you.

Welcome back to the forums, Andrew, and thanks for your contributions in the topic, @Martian2, @TaiShang and @Jlaw. I know the Chinese economy isn't 100% at its best right now but I didn't lose my faith in it despite the recent financial volatility.

The words of House Tyrell are "Growing Strong" and this is an appropriate description of China's development in the past decades to the present I think, regardless of what the China collapse theorists may predict.

Don't worry about the anti-China trolls, lads, I, as the Warden of the East, Lord of the Eyrie and Defender of the Vale will sent them all to the Wall once my men catch them so that they won't cause any trouble anymore in the Seven Kingdoms aka PDF. Depending on whether they'll become stewards, builders or rangers of the Night's Watch they'll have to deal with the merciless chilliness of the North and beyond the Wall, hostile wildlings, giants, wights or even White Walkers. Their nature might be unpredictable, yet the Lord Commander, Ser Alliser and Jon Snow will take care of them well. @XiangLong

But Lord Commander Jon Snow was slain in cold blood! We weep in dust and ashes at his demise and at the demise of House Stark.

 

[LowPost]

Hahaha you speak with such eloquence when you correlate with GoT euphemism! Lol. Thanks for that post and yes, thanks also for being the "moderate" Chinese poster in PDF.

I mean that. I appreciate you.

Ahaha thanks to you! I'm happy to see that someone other than @XiangLong is entertained by my GoT/ASOIAF references.

But Lord Commander Jon Snow was slain in cold blood! We weep in dust and ashes at his demise and at the demise of House Stark.

I was talking about an alternative Westeros, where Jeor Mormont is still the Lord Commander and Jon Snow is alive.

 

[Aepsilons]

Ahaha thanks to you! I'm happy to see that someone other than @XiangLong is entertained by my GoT/ASOIAF references.



I was talking about an alternative Westeros, where Jeor Mormont is still the Lord Commander and Jon Snow is alive.

Ah yes where Lord Mormont (elder) was still alive and th younger was not touched by the dastardly rock sickness. His unrequited love for his Kaleesi shall remain ......unanswered? lol.

Oh I can't wait for Season 6!!! As I can't wait for China to be nice to NIHON-KOKU, again.....


To you my brother : Ganbei!!

 

[Keel]

Welcome back to the forums, Andrew, and thanks for your contributions in the topic, @Martian2, @TaiShang and @Jlaw. I know the Chinese economy isn't 100% at its best right now but I didn't lose my faith in it despite the recent financial volatility.

The words of House Tyrell are "Growing Strong" and this is an appropriate description of China's development in the past decades to the present I think, regardless of what the China collapse theorists may predict.

Don't worry about the anti-China trolls, lads, I, as the Warden of the East, Lord of the Eyrie and Defender of the Vale will sent them all to the Wall once my men catch them so that they won't cause any trouble anymore in the Seven Kingdoms aka PDF. Depending on whether they'll become stewards, builders or rangers of the Night's Watch they'll have to deal with the merciless chilliness of the North and beyond the Wall, hostile wildlings, giants, wights or even White Walkers. Their nature might be unpredictable, yet the Lord Commander, Ser Alliser and Jon Snow will take care of them well. @XiangLong

Who are they in the forum? Anyone whom you are getting acquaintance with?

Guarding China against invading barbaric Jpnese Facists
WW2

 

[Aepsilons]

Who are they in the forum? Anyone whom you are getting acquaintance with?

Guarding China against invading barbaric Jpnese Facists
WW2

Seriously you can stop this seemingly counterintuitive pseudo-speculation. Let him talk to whom he wants to talk without labeling.

 

[Keel]

FDI keeps increasing in August
Updated: 2013-09-18 09:10
By LI JIABAO ( China Daily)

Comments

Summer Davos"

Foreign direct investment into China maintained its momentum in August, adding to signs of an upturn in the economy and growing investor confidence.

The Ministry of Commerce said on Tuesday that FDI inflow, excluding that to financial services, rose to $79.77 billion from January to August, up 6.37 percent year-on-year.

In August, the inflow was $8.38 billion, up 0.62 percent year-on-year but substantially lower than the 24.13 percent growth in July and 20.12 percent increase in June. However, ministry spokesman Shen Danyang said this is due mainly to a high base figure a year ago.

"Fluctuations in a single month are insufficient to reflect the big picture on FDI. There is no need to worry about (a reverse) in the trend," Shen said.

FDI to China reversed its slide in February and has maintained continuous growth, effectively supporting competitiveness of the nation's economy and global investors' confidence in the country's investment environment, he said.

But FDI globally has remained sluggish since last year amid slow economic growth.

"China's attraction for FDI this year is outstanding compared with other economies, and this growth will be steady in following months," Shen said.

FDI inflow for the whole year is expected to be higher than last year, although the yearly growth rate will probably not be very high. "We now focus more on the quality, structure and effectiveness rather than on growth pace," Shen said.

China's economy grew by 7.7 percent in 2012, the slowest in 13 years. Growth stood at 7.7 percent for the first three months of this year and slowed to 7.5 percent from April to June, but recent data suggest a rebound in growth.

Premier Li Keqiang said during the "Summer Davos" in Dalian, Liaoning province, last week that China's economy has entered a phase of medium and high growth. He reassured the world about the national economy's health, saying China will reach its target of 7.5 percent growth this year despite the complex global economic situation.

Lian Ping, chief economist at the Bank of Communications, said, "China's economic growth has showed more signs of recovery and the FDI inflow is, on the whole, in line with the trend."

The central government's measures to stabilize economic growth have strengthened global investors' confidence, while the efforts of deepening reforms helped investment and boosted the FDI inflow, Lian said.

"FDI in China will maintain steady growth in view of the potential investment opportunities in the country."

Responding to recent financial market turmoil in developing economies, Shen said, "China's economic growth is improving, and the trend will not be changed or affected by the temporary difficulties in some emerging countries."

Investment into the Chinese mainland comes mainly from 10 Asian countries and regions, including Hong Kong and Taiwan, and this investment rose by 7.87 percent year-on-year to $68.63 billion for the first eight months of the year.

Investment from the European Union rose by 24.3 percent year-on-year to $5.44 billion, while that from the United States increased by 18.04 percent to $2.50 billion.

Ge Shunqi, deputy head of the Institute of International Economics at Nankai University in Tianjin, spoke highly of China's FDI performance compared with weak willingness to invest across borders worldwide.

He said that China's FDI structure has also improved.

"Service sectors surpassed manufacturing to attract more than half of the FDI inflow in recent years. Amid the gradual opening-up, services, including telecoms, education and tourism, will be the main driver of China's FDI inflow," Ge said.

China's outbound direct investment in non-financial sectors increased by 18.5 percent year-on-year to $56.5 billion from January to August.

Investment in the seven major economies — Hong Kong, ASEAN, the EU, Australia, the US, Russia and Japan — was $39.11 billion, up 3 percent year-on-year. But investment in Japan fell by 25 percent.

Shen said: "China's outbound investment will maintain robust growth. Perhaps it won't take too long for the size of overseas investment to outstrip FDI into China."

As for trade prospects for 2013, Shen said China's foreign trade faces mounting difficulties in view of the continued slow growth in the global economy and particularly from the recent financial turmoil in emerging economies.

"But we still believe that exports and imports will improve in the following months owing to strengthened recovery in developed economies," Shen said.

FDI keeps increasing in August[1]|chinadaily.com.cn

 

[Speeder 2]

Glenn Solomon
Solomon is a partner at GGV Capital, a venture capital firm that invests in the U.S. and China.

The steady drumbeat of news of China’s macro-economic slowdown has continued, taking Chinese equity markets down seemingly with each headline. Meanwhile, the US stock markets have been hit hard in sympathy, with investors clearly worried about the impact a slowdown in China may have on the global economy. With this tumult, we’ve seen a chorus of negative sentiment from leading Silicon Valley voices regarding China.

Clearly all is not perfectly well in China right now, but its important to keep China’s economic growth in perspective. China’s 2015 GDP is estimated at over $11 trillion (in US dollars), over twice as much as both Japan and Germany and closing in on the US, with over 7% annual growth. The world has never witnessed this rate of growth for an economy so large. At GGV Capital, we remain excited by the prospects for China’s new economy, both shorter and longer term, and we believe investors will be rewarded for staying patient and doubling down as the less committed capital fleas the market. Consider the following:

New Economy Versus Old Economy

Outsiders find it difficult to fathom how quickly China has emerged as a modern, economic powerhouse. The immense Chinese economy we know today has grown out of trends and local reforms that are barely 30 years old. The past 150 years of development in the US have essentially occurred 5x faster in China. And, because China’s economic development has occurred more recently, its growth has been infused with much more modern technology than is the case in the US.

As my GGV Capital partner Hans Tung recently mentioned on CNBC, one consequence of the rapid, technology-heavy development cycle in China is a bifurcation between traditional, “old economy” companies, many of which are SOEs (state-owned enterprises) that trade publicly on China’s local exchanges, and “new economy” mobile and internet companies. As a result, the dichotomy we see in the US between slow growing, declining industries such as durables manufacturing or brick & mortar retail, and rapidly growing, tech-enabled segments such as sharing economy and mobile, on-demand companies is even more pronounced in China. While old economy industries in China are slowing, the growth in new economy industries remains vibrant. As we see in many of our own Chinese portfolio companies, new economy models are flourishing in industries such as retail, exports, travel, real estate, food and auto. Apple is flourishing in China. Software is eating China, as it is in the US.

Much of the growing middle and upper class in China is employed by new economy companies and increasing consumption of new economy goods and services is driven by this group as well. Macro-economic factors are certainly important, but the micro-economic dynamics of the new economy in China are profound. As I’ve written earlier, because public stocks are not widely held in China, the recent declines in local stock indices is hurting a relatively small percent of the Chinese population. As long as the Chinese consumer stays in the game, the new economy in China will continue to flourish.

what does 然并卵 mean in your signiture?

 

[Götterdämmerung]

Repetition makes a certain image of the target in the minds of the gullible. And yes, it is often the gullible that is most needed to pull out a color revolution.

Especially done in a professional manner, repetition works, I guess. There is an entire social-personal psychology behind it. China must study it very carefully and run some social engineering on the target countries. The Black-White race issue in the US would be a nice test zone.

Actually, repetition have shown to actually work best. You should repeat it often because that's how babies learn. Unfortunately that's how those idiots learn also.

Have you guys heard of Project MKUltra and Operation Mockingbird? They have other names now, but both of them are still in operation whenever the US does its dirty works.