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China's economic imbalance is huge. Below is a link to an excellent BBC documentary that explains the state of China's current economic situation and how if it falls how would effect the rest of the Western world in particular. Although it is nearly an hour, it is definitely worth watching when you have the time.
funny the story talks about China's debt and credit - shouldn't the BBC worry about that for the UK and US first?
China's public debt seems to be about 30% in 2012, compared with 90% for the UK and 75% for the US. japan has 220% and seems to be doing ok.
In terms of external debt, China has 37.5%, compared with 106% for the US and 406% for the UK. Seriously, which is worse?
As much as the UK/US will hate to see China replacing US as the world's largest economy soon, it WILL happen. Why doesn't the BBC stop repeating the "Oh, China has so many internal problems and it is gonna implode and collapse" wishful thinking. Adapt to the new world where the US ceases to dominate... is it really that hard?
funny the story talks about China's debt and credit - shouldn't the BBC worry about that for the UK and US first?
Is it bad to acknowledge that China has rising credit debt?
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China's public debt seems to be about 30% in 2012, compared with 90% for the UK and 75% for the US. japan has 220% and seems to be doing ok.
Ehhh, I wouldn't say that Japan is "doing okay." They're above water for now, but the forecast doesn't look very good for them over the coming decades. It has as much if not more to do with their demographics as it does their business culture, production, etc.
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In terms of external debt, China has 37.5%, compared with 106% for the US and 406% for the UK. Seriously, which is worse?
Again, is it bad to acknowledge that China has debts, as well?
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As much as the UK/US will hate to see China replacing US as the world's largest economy soon, it WILL happen. Why doesn't the BBC stop repeating the "Oh, China has so many internal problems and it is gonna implode and collapse" wishful thinking. Adapt to the new world where the US ceases to dominate... is it really that hard?
Whoa there, cowboy... chill out! Yes, at the rate that it's going, China will indeed replace the US as the world's economy in the coming decades. China does have internal problems, and again: I fail to see how identifying and acknowledging that these things exist is such a negative thing to do, especially when the US and UK's dirty laundry in terms of their economies and internal problems are aired out for the entire rest of the world to see. I find it laughable to say that China will "explode and collapse," but I think that simultaneously, the attitude that China will continue to see growth at its recent, astronomical levels indefinitely is equally wishful thinking. It's really anyone's guess as to how long it will be before any one thing happens, because there are so many variables, domestic and otherwise, that will affect the economies of these countries in the future. Anyone who tells you that they know exactly how and when it will play out is either Nostradamus, or a Snake Oil salesman.
funny the story talks about China's debt and credit - shouldn't the BBC worry about that for the UK and US first?
China's public debt seems to be about 30% in 2012, compared with 90% for the UK and 75% for the US. japan has 220% and seems to be doing ok.
In terms of external debt, China has 37.5%, compared with 106% for the US and 406% for the UK. Seriously, which is worse?
As much as the UK/US will hate to see China replacing US as the world's largest economy soon, it WILL happen. Why doesn't the BBC stop repeating the "Oh, China has so many internal problems and it is gonna implode and collapse" wishful thinking. Adapt to the new world where the US ceases to dominate... is it really that hard?
I agree the US & UK need to desperately work on reducing their debt. Regarding China's economy, it is a virtual certainty that China will surpass the USA GDP in the future. But I wouldn't brag about that as the day that China surpasses the USA GDP, china will have finally reached a point where 4 Chinese are as productive as 1 American.
China has a couple of other serious problems including severe pollution that will cause massive health problems and be extremely costly to clean up. And china's 1 child policy will result in unfavorable demographics for business in the future with too many elderly not working.
Please understand that I worked in China for an extended period of time and very much enjoyed my time there and I'm thrilled that China's economy has expanded at a fast pace through the hard work and good decisions of the Chinese. I hope that leaders of both countries will work to better relations between the world's 2 economic superpowers in the future.
China's economy won't collapse and will likely continue to grow at rates faster than the developed world. Note, however, that a mere 2% slowdown in China's economy hurts ordinary Chinese a lot. So even if 7% growth is still impressive, many Chinese will suffer. There is also a lot of hidden debt that is off the books like municipalities, gov't-affiliated corporations and publicly-owned factories so that 30% is understated and located in places where it can do a lot of damage. Whether this all leads to social unrest is still unclear though.
China's economy won't collapse and will likely continue to grow at rates faster than the developed world. Note, however, that a mere 2% slowdown in China's economy hurts ordinary Chinese a lot. So even if 7% growth is still impressive, many Chinese will suffer. There is also a lot of hidden debt that is off the books like municipalities, gov't-affiliated corporations and publicly-owned factories so that 30% is understated and located in places where it can do a lot of damage. Whether this all leads to social unrest is still unclear though.
This is correct.
Official public debt figures aren't exactly a good indicator of overall government debt. When taking local and state governments into account the US's public debt is closer to 300%. When China's shadow banking system and local governments are taken into to account, their "public" debt is closer to 200%-250%. The primary issue with China's debt isn't necessarily the raw figures but the amount of nonperforming loans that the Chinese gov't is going to have to eat.
I agree the US & UK need to desperately work on reducing their debt. Regarding China's economy, it is a virtual certainty that China will surpass the USA GDP in the future. But I wouldn't brag about that as the day that China surpasses the USA GDP, china will have finally reached a point where 4 Chinese are as productive as 1 American.
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Why not?
In 1980, China's GDP per capita ($300) is 2.5% of America's, which means 40 Chinese were as productive as one America.
From 2.5% to 25% in 40 years, a new massive middle class created. Many families have cars, from struggling to buy a bicycle. Quality of life dramatically improved. Life expectancy 5 years longer, roads, higways, subways, high speed trains built, many areas becoming world leaders. In the 1980s, a typical Chinese family would be lucky to have meat on the table every day, today, they are traveling to the US, Canada, Europe, South America, Africa with their expensive camaras.
I think the Chinese should be proud. What have the US achieved during the 40 years? Are middle class enjoying a better life?
China will never have the same quality of life Americans enjoy, if you look at their population, habitable land, resources etc. I think China will stablize when it reaches what Taiwan currently has now in terms of per capita wealth.
In 1980, China's GDP per capita ($300) is 2.5% of America's, which means 40 Chinese were as productive as one America.
From 2.5% to 25% in 40 years, a new massive middle class created. Many families have cars, from struggling to buy a bicycle. Quality of life dramatically improved. Life expectancy 5 years longer, roads, higways, subways, high speed trains built, many areas becoming world leaders. In the 1980s, a typical Chinese family would be lucky to have meat on the table every day, today, they are traveling to the US, Canada, Europe, South America, Africa with their expensive camaras.
I think the Chinese should be proud. What have the US achieved during the 40 years? Are middle class enjoying a better life?
China will never have the same quality of life Americans enjoy, if you look at their population, habitable land, resources etc. I think China will stablize when it reaches what Taiwan currently has now in terms of per capita wealth.
If you are some poor farmer, what exactly do you have to be proud of? This is the fallacy of placing emphasis on collective wealth. Ultimately, the only balance sheet and income statement that matters is yours.
In 1980, China's GDP per capita ($300) is 2.5% of America's, which means 40 Chinese were as productive as one America.
From 2.5% to 25% in 40 years, a new massive middle class created. Many families have cars, from struggling to buy a bicycle. Quality of life dramatically improved. Life expectancy 5 years longer, roads, higways, subways, high speed trains built, many areas becoming world leaders. In the 1980s, a typical Chinese family would be lucky to have meat on the table every day, today, they are traveling to the US, Canada, Europe, South America, Africa with their expensive camaras.
I think the Chinese should be proud. What have the US achieved during the 40 years? Are middle class enjoying a better life?
China will never have the same quality of life Americans enjoy, if you look at their population, habitable land, resources etc. I think China will stablize when it reaches what Taiwan currently has now in terms of per capita wealth.
I think the Middle Class in the USA enjoys a better life than 40 years ago, awesome electronics, internet, computers, and most of that due to Americans blazing the new technology...so I think we have much to be proud and thankful about. I can tell you I was a teenager 40 years ago and had no phone, computer, no tv, no radio, and worked hard to make $1.60/hr so my kids have a better life.
I agree China has made tremendous progress on the economic front and I think the Taiwan wealth bar is probably achievable for China in the next 25 years.
I think the Middle Class in the USA enjoys a better life than 40 years ago, awesome electronics, internet, computers, and most of that due to Americans blazing the new technology...so I think we have much to be proud and thankful about. I can tell you I was a teenager 40 years ago and had no phone, computer, no tv, no radio, and worked hard to make $1.60/hr so my kids have a better life.
I agree China has made tremendous progress on the economic front and I think the Taiwan wealth bar is probably achievable for China in the next 25 years.
I don't deny Americans' life improved too, apparently, but not as dramatically as in China.
40 years ago - that will be 1974, most Chinese families would be lucky to have enough food for their children. A bicycle, a sewing machine are valuable assets; In the city, a household of 4 usually have about 200 sf of living space.
30 years ago, most Chinese didn't have a TV or a toilet at home - they had to go to those public restrooms without toilets, just a few holes which were disgusting - this is how bad life was.
20 years go, things were better, but hardly anyone has a personal vehicle. The vast majority of Chinese couldn't afford taking a flight somewhere. $100 sounded a LOT of money.
I think cars were never considered a luxury in America even in the 70s.
Today, they, at least those in cities, pretty have everything the Americans have, cars, computers, LED TVs, ipads etc. They travel overseas and generally think stuff in America is "so cheap".
Admittedly, overall living standards are not as good as in America, but the change can only be described as "extremely dramatic".
You made $1.6/hr 40 years ago, which is about $260 a month. A typical Chinese worker was making RMB 50-100 a month, which is like $10 a month. No kidding. Today, a construction worker or average office lady in Shanghai makes $1000-1500 a month.
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