OECD Predicts China #1 Economy by 2016

[ChinaToday]

Get ready for the massive consumer push by the Chinese over the upcoming years and decades as the government strives to drive the economic engine via consumer spending.
The modification to the current one-child policy, which I recently discussed in these pages, will help create an even bigger middle class in the country that will drive up the demand for goods and services. (Read “China’s Expected Baby Boom a Boon for U.S. Business.”)
The Organization for Economic Cooperation and Development (OECD) has become more bullish on China, and predicts Chinese gross domestic product (GDP) growth will rise to 8.2% in 2014, driven by a rise in domestic consumer spending. (Source: “OECD sees China growth accelerating in 2014,” China Daily, November 20, 2013.) The OECD even goes as far as to say the Chinese economy could surpass the U.S. economy to become the world’s biggest economy by 2016. While this is faster than I expect, it’s clearly not impossible, given the rise in income levels and spending.
The middle class in China will drive the economic engine of the country, unlike what we are seeing in America with the declining spending prowess of the middle class. In fact, what we are seeing in China is similar to the power of the U.S. middle class that drove the Industrial Revolution in the late 1800s and early 1900s.
If China can emulate what happened in the U.S. then, there could be some golden years ahead for the Chinese economy.
To play the expected rise in consumer spending in China, which is increasing at double-digit rates and is likely to continue at this pace, I would suggest playing related companies or exchange-traded funds (ETFs).
An interesting ETF to look at is the Global X China Consumer ETF (NYSEArca/CHIQ), which correlates with the Solactive China Consumer Index. The fund has assets of $174 million and a management expense ratio of 0.65%.

65%.

Chart courtesy of StockCharts.com - Simply the Web's Best Financial Charts
The Solactive China Consumer Index tracks Chinese consumer spending; therefore, it should expand as the country’s middle class grows and drives consumer spending. The sector weightings include 57.7% consumer cyclical and 33.85% consumer defensive.
The top areas of investment for the underlying index as of September 30 were food and beverages (25.8%), retail (24.0%), automobiles (17.3%), travel and leisure (13.2%), personal and household goods (11.3%), health care (6.2%), and technology (2.2%).
The top five holdings as of November 19 were Tingyi Holding Corporation (5.23%), Dongfeng Motor Group Company Limited (5.2%), Guangzhou Automobile Group Co., Ltd. (5.1%), Hengan International Group Company Limited (5.01%), and China Resources Enterprise, Ltd. (4.79%).
The Global X China Consumer ETF makes sense if you want to play the expected rise in Chinese consumer spending directly. If you feel more comfortable playing China’s rise in consumer spending via U.S. companies, consider taking a look at corporations that have an established presence in the Chinese economy, like Wal-Mart Stores, Inc. (NYSE/WMT).


Read more at http://www.business2community.com/finance/oecd-predicts-china-1-economy-2016-consumer-spending-soar-0692587#PB2VlVPmTpXxB4D5.99

 

[Chinese-Dragon]

The OECD is just following the old prediction from the IMF.

But they are talking about GDP (PPP) which is bullsh*t for international comparisons.

2020 is the general consensus date when we're talk about proper GDP.

 

[twocents]

Predictions don't mean much of anything. Let's worry about what we do rather than what others think or predict.

 

[UKBengali]

The OECD is just following the old prediction from the IMF.

But they are talking about GDP (PPP) which is bullsh*t for international comparisons.

2020 is the general consensus date when we're talk about proper GDP.

Not necessarily.

If you compare China with Japan, then the difference in nominal GDP is 50% more for China.

In a range of products like car, Chinese buy way more than 50% compared to Japan.

China's "effect" on the world economy is probably in-between GDP PPP and GDP nominal

 

[Chinese-Dragon]

Not necessarily.

If you compare China with Japan, then the difference in nominal GDP is 50% more for China.

In a range of products like car, Chinese buy way more than 50% compared to Japan.

China's "efffect" on the world economy is probably in-between in GDP PPP and GDP nominal

The mid-point between nominal GDP and PPP is a decent compromise between the two.

The international media uses GDP (PPP) for China, for two reasons:

1) It is shocking, and makes nice headlines.

2) The US government believes that the Chinese Yuan is undervalued by around 50%, which means our nominal GDP by exchange rate is being significantly understated.

 

[Rainmaker]

It's not even a challenge for us to overtake the US economy. By 2030 we will be double the size of the US economy.

China has a population of 1.3 billion.
US only has 315 million.
Not enough people to compete with China long term. Only India has potential but India is constrained by overpopulation, lack of resources, lack of education, lack of infrastructure, segregating caste system and arguably the most corrupt political system in the world. Indian corruption alone will guarantee that they don't get anywhere near China. India will also be lucky if they can keep their country united considering the amount of separatist groups.

 

[Kyusuibu Honbu]

It's not even a challenge for us to overtake the US economy. By 2030 we will be double the size of the US economy.

China has a population of 1.3 billion.
US only has 315 million.

By that logic Chinese Govt would have spend same amount as American Govt spends on its citizens per capita. I wonder from where China will get resources for that level of consumption?

Not enough people to compete with China long term. Only India has potential but India is constrained by overpopulation, lack of resources, lack of education, lack of infrastructure, segregating caste system and arguably the most corrupt political system in the world. Indian corruption alone will guarantee that they don't get anywhere near China.

Indian corruption is nowhere close to trillions as it is with .........

Top 10 countries with the highest measured cumulative illicit financial outflows between 2001 and 2010 were:

1. China: US$2.74 trillion
2. Mexico: US$476 billion
3. Malaysia: US$285 billon
4. Saudi Arabia: US$210 billion
5. Russia: US$152 billion
6. Philippines: US$138 billion
7. Nigeria: US$129 billion
8. India: US$123 billion
9. Indonesia: US$109 billion
10. United Arab Emirates: US$107 billion

Global Financial Integrity - Reports - Illicit Financial Flows from Developing Countries 2001-2010 - Overview

India will also be lucky if they can keep their country united considering the amount of separatist groups.

India had issues with separatists in the last 63 years and India has not only gotten stronger but also grown in size, with addition of Sikkim and Arunachal Pradesh as Indian states

If would say, China would be lucky not to get gang-banged by all the states it is currently making enemies with.

 

[faithfulguy]

The mid-point between nominal GDP and PPP is a decent compromise between the two.

The international media uses GDP (PPP) for China, for two reasons:

1) It is shocking, and makes nice headlines.

2) The US government believes that the Chinese Yuan is undervalued by around 50%, which means our nominal GDP by exchange rate is being significantly understated.

For some reason, US is claiming that yuan is undervalued by around 50% every year for the last 10 years, even though yuan had appreciated by 25% in the last 10 years. Its clear that US will continue to believe that yuan is undervalued unless the trade deficit is eliminated.

 

[Rainmaker]

By that logic Chinese Govt would have spend same amount as American Govt spends on its citizens per capita. I wonder from where China will get resources for that level of consumption?




Indian corruption is nowhere close to trillions as it is with .........



Global Financial Integrity - Reports - Illicit Financial Flows from Developing Countries 2001-2010 - Overview



India had issues with separatists in the last 63 years and India has not only gotten stronger but also grown in size, with addition of Sikkim and Arunachal Pradesh as Indian states

If would say, China would be lucky not to get gang-banged by all the states it is currently making enemies with.

You just need to see the difference between Chinese economic development and Indian economic development to see who has the most corrouption. India is a highly inefficient system where every politician is corrupt to the bone and nothing gets done in India. Whereas corruption in China is different where the officials actually do their job and then they take personal rewards.

I don't buy that list whatsoever. Pretty much every Indian politician has a Swiss bank account. Most of these western created lists has heavy anti-China bias because we are their nearest challenger (India is considered a western pawn) but give India a pass because it's a 'democracy' (dictatorship in reality). It's widely known India is probably the most corrupt country on earth. To be blunt, brown and black people are naturally far more corrupt people than yellow or white people. Just look at Middle Eastern, South Asian and African countries. They are all corrupt. By comparison the level of corruption in yellow and white countries is much lower.

Not being racist but that's just a basic observation. Ask any white person on the street which country has more corruption, China or India, any knowledgeable person would say India is 100 times more corrupt than China.

As bad as corruption is in China, it's on a whole different stratosphere in India.

Regarding separatism. India will always have separatism. That's because India is a union where it's an artificially created union like the Soviet Union. As people get more information about these separatist movements, it's going to cause India more problems.

India is like Yuguslavia where one little trigger and India could break up into 34 countries like Lee Kuan Yew said.
Unions never last more than 90 years.

 

[MohitV]

You just need to see the difference between Chinese economic development and Indian economic development to see who has the most corrouption. India is a highly inefficient system where every politician is corrupt to the bone and nothing gets done in India. Whereas corruption in China is different where the officials actually do their job and then they take personal rewards.

I don't buy that list whatsoever. Pretty much every Indian politician has a Swiss bank account. Most of these western created lists has heavy anti-China bias because we are their nearest challenger (India is considered a western pawn) but give India a pass because it's a 'democracy' (dictatorship in reality). It's widely known India is probably the most corrupt country on earth. To be blunt, brown and black people are naturally far more corrupt people than yellow or white people. Just look at Middle Eastern, South Asian and African countries. They are all corrupt. By comparison the level of corruption in yellow and white countries is much lower.

Not being racist but that's just a basic observation. Ask any white person on the street which country has more corruption, China or India, any knowledgeable person would say India is 100 times more corrupt than China.

As bad as corruption is in China, it's on a whole different stratosphere in India.

Regarding separatism. India will always have separatism. That's because India is a union where it's an artificially created union like the Soviet Union. As people get more information about these separatist movements, it's going to cause India more problems.

India is like Yuguslavia where one little trigger and India could break up into 34 countries like Lee Kuan Yew said.
Unions never last more than 90 years.

we live in our country...we never felt this...with people of different region intermingling with eachother and urbanisation ...people are leaving one state for another without any problem.......how come foreigners got this feeling of 34 countries....

 

[Kyusuibu Honbu]

You just need to see the difference between Chinese economic development and Indian economic development to see who has the most corrouption. India is a highly inefficient system where every politician is corrupt to the bone and nothing gets done in India. Whereas corruption in China is different where the officials actually do their job and then they take personal rewards.

So for great efficiency you are willing to sacrifice $2 trillion?

I don't buy that list whatsoever.

I do not blame you for that

Pretty much every Indian politician has a Swiss bank account.

proof?

Most of these western created lists has heavy anti-China bias because we are their nearest challenger

Yup! all Western created lists on China are biased, everything from China's GDP figures, IQ ranges, HDI figures etc.

(India is considered a western pawn) but give India a pass because it's a 'democracy' (dictatorship in reality).

When India becomes a dictatorship China will shit her pants like in 1971, where you ran away and abandoned Pakistan

It's widely known India is probably the most corrupt country on earth.

Maybe in Baidu, not in google

To be blunt, brown and black people are naturally far more corrupt people than yellow or white people.

Chinese science anyone? where color of a person defines the level of corruption?

Just look at Middle Eastern and South Asian countries. They are all corrupt. By comparison the level of corruption in yellow and white countries is much lower.

So you are saying Middle-Easterns aremore corrupt because of their skin tone

Not being racist but that's just a basic observation. Ask any white person on the street which country has more corruption, China or India, any knowledgeable person would say India is 100 times more corrupt than China.

The inferiority complex seems to have reached its limits

Why would I need some random Caucasian male's opinion on street on corruption, China or India, rather than relying on a study.

As bad as corruption is in China, it's on a whole different stratosphere in India.

Yup diffrence between $123 billion and ovr $ 2 trillion is indeed that of a stratopshere.

Regarding separatism. India will always have separatism. That's because India is a union where it's an artificially created union like the Soviet Union. As people get more information about these separatist movements, it's going to cause India more problems.

So why is it that India has gotten larger in size?

India is like Yuguslavia where one little trigger and India could break up into 34 countries like Lee Kuan Yew said.

Lee Kuan Yew also said - 30 years later, Australian leaders still remember that "white trash" comment | News | Singapolitics

Do not see Australia anywhere near that comment

Unions never last more than 90 years.

Then i guess in coming yearswe should see the following new nations-
Republic of China
Mengjiang
Manchukuo
Zhōnghuá Mínguó
Zhōnghuá Mínguó Wéixīn Zhèngfǔ
Republic of Tibet
Republic of Xinjiang
Jìdōng Fánggòng Zìzhì Zhèngfǔ
Chunghwa Minkuo
etc
Just like good old times, eh?

we live in our country...we never felt this...with people of different region intermingling with eachother and urbanisation ...people are leaving one state for another without any problem.......how come foreigners got this feeling of 34 countries....

When you are raised in nation believing ethnic superiority, not unified nation, cultural revolutions and great leaps, such thoughts are common

 

[Chinese-Dragon]

It's not even a challenge for us to overtake the US economy. By 2030 we will be double the size of the US economy.

China has a population of 1.3 billion.
US only has 315 million.
Not enough people to compete with China long term. Only India has potential but India is constrained by overpopulation, lack of resources, lack of education, lack of infrastructure, segregating caste system and arguably the most corrupt political system in the world. Indian corruption alone will guarantee that they don't get anywhere near China. India will also be lucky if they can keep their country united considering the amount of separatist groups.

Forget about India. According to India's favourite President Kalam, India is already a superpower.


India to become superpower by 2012: Kalam - Economic Times


This thread is about China so we should focus on that.

 

[UKBengali]

You just need to see the difference between To be blunt, brown and black people are naturally far more corrupt people than yellow or white people. Just look at Middle Eastern, South Asian and African countries. They are all corrupt. By comparison the level of corruption in yellow and white countries is much lower.

I think that this is a very simplistic observation to make.

Look at "brown" Sri Lanka, Turkey and Malaysia and see how well they are progressing.

BD is very corrupt but that is partly due to history and the external(Indian) influence on it's political system. But even then BD is developing appreciably better than India. An independent BD from 1947(rather than 1971) would be streets ahead of both Pakistan and India now.

You also need to look at the divergent ethnicities that are present in countries such as India to understand why they are not making all that much progress economically.

 

[GCTom]

It will be no big deal if China's economy become the largest in 2016, 2025 or 2050 as it's per capita GDP is still so low compares to others.

What is more important is for China to raise its per capita GDP and solve many of China's current internal problems to create a well-off society.

 

[Rainmaker]

So for great efficiency you are willing to sacrifice $2 trillion?




I do not blame you for that


proof?



Yup! all Western created lists on China are biased, everything from China's GDP figures, IQ ranges, HDI figures etc.




When India becomes a dictatorship China will shit her pants like in 1971, where you ran away and abandoned Pakistan



Maybe in Baidu, not in google




Chinese science anyone? where color of a person defines the level of corruption?



So you are saying Middle-Easterns aremore corrupt because of their skin tone



The inferiority complex seems to have reached its limits

Why would I need some random Caucasian male's opinion on street on corruption, China or India, rather than relying on a study.



Yup diffrence between $123 billion and ovr $ 2 trillion is indeed that of a stratopshere.



So why is it that India has gotten larger in size?



Lee Kuan Yew also said - 30 years later, Australian leaders still remember that "white trash" comment | News | Singapolitics

Do not see Australia anywhere near that comment



Then i guess in coming yearswe should see the following new nations-
Republic of China
Mengjiang
Manchukuo
Zhōnghuá Mínguó
Zhōnghuá Mínguó Wéixīn Zhèngfǔ
Republic of Tibet
Republic of Xinjiang
Jìdōng Fánggòng Zìzhì Zhèngfǔ
Chunghwa Minkuo
etc
Just like good old times, eh?





When you are raised in nation believing ethnic superiority, not unified nation, cultural revolutions and great leaps, such thoughts are common

Your comments prove my point. Rather than admitting what is obvious for everyone to see and globally accepted....that India is arguable the most corrupt 'country' on earth, you try to sugarcoat it.

How can you even solve a problem you don't admit. This is exactly why it's impossible for India to ever catch China.

It's our ability to admit we have a problem and take steps to solve that is what's different between a rising nation like China and an already stagnating 'country' like India.

Indians are already going around crowing themselves a superpower as your president Kalam did.

To even suggest that China has more corruption than India shows how delusional Indians are.

India is one of, if not the most corrupt 'country' in the world. This is exactly why China will extend the lead over India. I can bring up many articles written by Indians saying how much India envy our success but this is not about scoring brownie points.

If India is to catch us, you need to solve your corruption problem that's ingrained in Hindu culture. Remove your caste system that's ingrained in Hindu culture. Educate your population. Build up the infrastructure. And how you even solve the overpopulation problem is beyond me.

I don't see many, if any, of these problems will be solved. India lacks the leadership skills necessary to tackle these problems.

India by nature is a messy 'country' that was put together by the British. It was Winston Churchill that said "India is a geographical term. It is no more a united nation than the Equator." He should know India, he gave you 'independence'.

There are massive chunks of the Indian population that wants their own country, pretty much every region. If India manages to stay united like it is now by 2080, India would have done exceedingly well. But I don't think it will happen .

India would need to solve all these problems to even be a challenge to China.

But as we have seen since the late 1940's India has always been the poor man's China in all areas. Don't bet on it ever changing.