Web-site/URL: http://www.cbsnews.com/8301-503983_162- … ?tag=stack
Considering the fact that CHINA thinks that they are the giants of the world and can do whatever they want when they want and without consequences, this wouldn't be a shock
China are already a giant in the world. Dealing with it without panicky statements like 'they think they can do what they want' is not really helpful. If it helps, they are not likely to behave in the world in the way that the US has done, so my guess is that you are quite safe from them.
No, they aren't. Unlike the US, they stopped any sort of "stimulus" and have so far not inflated their currency to keep up with the US. Nor would I expect them to.
One main advantage China has is it's large population of poor. As Americans are less and less able to buy Chinese products, the status of America as China's largest trading partner will wane. Rather than being forced to find new markets abroad, the Chinese will simply be able to develop internal markets. The only reason they haven't done this is because of the Communist Party. In order to expand their industrial base, the ChiComs would have to further liberalize their economy, which would come at the expense of state control. Sooner or later, I think, they'll be forced to do it as their exports fall off.
China's currency is grossly overvalued, they have a ridiculous debt-to-GDP ratio, and are sitting on a mountain of bad loans from their central bank. Looks pretty bubble-iscious to me.
Their news reports exactly the opposite of this - it calls for expanding the domestic market. Also they report that GDP grew between 8% and 9%, for the first time half the growth due to the domestic sector.
The high house prices would definately be a bubble in the west, here I am not so sure that it would work in the same way. The controls are more easily applied and everyone seems to understand that the economy depends on stability. Not that this would stop people buying or selling in itself of course, but the government is publicly going after property speculators and developers who hold housing stocks to push up the price.
My own opinion is that outside economics can force movement to some extent but the Chinese can do things western governments can't.
For the most part the Chinese have a stable currency. Since they don't inflate their currency like the West has, they should avoid the bubbles that plague the West.
When I said that the US would become less and less important as a trade partner, it is because the US is not able to purchase the amount or number of goods from China as it did in the past.
The benefit China has, as you pointed out, is a potential market that is at least double the size of the US population, and that is where the Chinese government will focus their attention.
It does, however, hold an element of risk for the Chinese government. Liberal markets have always threatened the stability of autocratic governments. At the very least I'd expect the standard of living for the Chinese people to increase as they focus more on domestic production and sales than they do as the exporter of the world. I would like to point out that Japan did much the same thing in the 1950's and 1960's in the electronics field. They are now a world leader in that field. It'll be interesting to see the Chinese apply the same processes and how that will turn out for them.
"For the most part the Chinese have a stable currency."
No, they have an artificially controlled currency, and that cannot last forever.
"China's currency is grossly overvalued, they have a ridiculous debt-to-GDP ratio, and are sitting on a mountain of bad loans from their central bank. Looks pretty bubble-iscious to me."
I would agree with this statement.
Being poor is an "advantage" how?
Having a large poor segment in the population means that China can increase its domestic market and so significantly control effects from rising and falling outside trade.
Imagining that China can instantly transform the hundreds of millions living in stark poverty in the center and west into American-style middle class consumers whenever it's convenient is a fantasy. If its export market is disrupted in any significant way (either by demand, shifting labor markets, or an honest revaluation of its currency), China's economy will be severely impacted.
All the bad loans on the central bank's books may end up being an even bigger issue.
I know this thread is kind of old and dead but I cant help myself.
I just wanted to point out... the clearest sign that they are building a bubble is the fact that the government is still letting the economy grow at breakneck speed, even as the rest of the world is going through massive recessions. They are building factories, pumping out raw materials and cheap crap faster than ever, yet the demand in the rest of the world is down. The reason why this is happening is that the government is willing to sacrifice everything for gains now, even though as history has shown time and time again, China is destined for a crash in the near future.
Think Japan. Everything China has done, is exactly what Japan did post world war 2.
First they started making cheap crap, and then graduated to higher quality products. All the while the government setup the economy to give companies massive advantages and allowed banks to float loans with no oversight. It all went belly up after 30 years and Japan has never really covered, even 20 years after the fact.
China is about due for a nasty taste of reality, in perhaps the next 10 years or so.
Plus making the transition from cheap crap capital of the world to a more developed, dynamic economy is going to get rocky. Companies are already looking elsewhere for cheaper labor. The new policy is to build a factory in china and as soon as its finished start looking to build one in vietnam or indonesia.
China is in a gigantic bubble. All I saw were empty apartment blocks, banks and empty shopping malls I couldn't afford to shop in.
What more evidence do you need?
China has the largest potential pool of worker-customers that the world has ever seen. The amount of economic ignorance on here is amazing. Look, the majority of Chinese are still dirt farmers. Nothing wrong with that, until the end of WW II, most Americans were dirt farmers. What this means is that China is still in the early stages of industrial growth. Until recently, most of China's productive capacity has been going to foreign nations like the US. Think Japan in the 1970's.
But since most of the world isn't buying stuff anymore, that productive capacity has to go somewhere. Where will it go? Domestic consumption. Mass production creates goods for the masses. And China has a lot of masses. There will be hiccups along the road, but most of what used to get exported will soon be kept for use by the Chinese people. They're about to get a massive boost to their standard of living.
by ga anderson 7 years ago
OK, Junko, here we go.Why is China's economic growth, and likely supplanting of the U.S. economy as the world's largest a conspiracy?Yes, sometimes forum exchanges do amount to a game, sometimes a relevant one and sometimes a waste of time. But we still have the choice to be players or...
by OLYHOOCH 10 years ago
(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...
by Brandon Daniel 7 years ago
Should the U.S. be worried that China is massively building up their military right now?China is building up their military at a greater rate than Hitler did prior to WW2. China's military is as technologically advanced as ours.
by JKSophie 9 years ago
A shocking news came out early this month about a 7-month pregnant Chinese woman who was forced to have an abortion because she already has a kid and cannot pay the fine of £4,000. This is one of the many painful instances brought by the one-child policy in China. Although, we cannot discount...
by Beata Stasak 10 years ago
Do you think it is wise to praise the Chinese successful 'state capitalism' ?The China's semi-command economics are successful in times of the global recession and for some people it feels like the way to go. There is growing Chinese investment all around the world.Behind U.S. global expansion was...
by Felixedet2000 9 years ago
With China set to overthrow the united sate of America by 2020 as the world's biggest economy what is the future of the world going to be like in the hands of China?Will the world fair better under China than it did under America, because the change of baton is just few year ahead.
Copyright © 2021 Maven Media Brands, LLC and respective content providers on this website. HubPages® is a registered trademark of Maven Coalition, Inc. Other product and company names shown may be trademarks of their respective owners. Maven Media Brands, LLC and respective content providers to this website may receive compensation for some links to products and services on this website.
|HubPages Device ID||This is used to identify particular browsers or devices when the access the service, and is used for security reasons.|
|Login||This is necessary to sign in to the HubPages Service.|
|HubPages Traffic Pixel||This is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.|
|Remarketing Pixels||We may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.|
|Conversion Tracking Pixels||We may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.|