China now third largest economy in the world

[kronic]

China overtakes Germany as world’s third economy

By Geoff Dyer in Beijing

Published: January 14 2009 14:20 | Last updated: January 14 2009 14:20

China has overtaken Germany to become the world’s third largest economy in 2007 after the Chinese authorities on Wednesday revised upwards the figures for growth during that year.

China’s National Bureau of Statistics said that the economy expanded by 13 per cent in 2007, a sharp increase from the 11.9 per cent growth rate the authorities had previously stated.

With only the US and Japan now larger than China, the new figures highlight the rapid transformation the Chinese economy has undergone over the last 30 years since the Mao-era controls were first eased, although the economy is now suffering the toughest period in a decade as a result of the global financial crisis.

The news will also reinforce the case for giving China and other large emerging economies a bigger role in global financial decision-making, even if China has been hesitant about taking on new responsibilities.

“It is symbolically significant that China is now bigger than Germany and it will not be too long before its economy overtakes Japan,” said Mark Williams at Capital Economics in London.

After slowing sharply in recent months, many economists believe Chinese growth this year will fall well short of the 8 per cent that government officials are predicting. However, given the steep declines forecast in many developed economies as a result of the crisis, China will be one of the main contributors to global growth.

In the medium-term, economists say there is still plenty of scope for China to maintain relatively high growth rates because the process of urbanization and technology catch-up still has decades to run, however the outlook will be complicated by a rapidly ageing population and the costs of heavy damage to the environment.

Goldman Sachs has predicted that the Chinese economy will overtake the US by around 2040, while the Economist Intelligence Unit forecasts that using purchasing power parity, which adjusts for price differences between countries to reflect the actual buying power of local incomes, China will be larger than the US by 2017.

However, despite the rapid growth and the hundreds of millions of people lifted out of poverty, China remains a relatively poor country. In the World Bank’s rankings of GDP per capita for 2007 using purchasing power parity, China was in 122nd place on $5,370, behind Egypt, El Salvador and Armenia.

According to the IMF, Germany’s GDP was $3,321bn in 2007, using market exchange rates for that year, while under the new estimate China’s GDP was $3,382bn. US GDP was $13,807bn and Japan $4,382bn. China is also close to surpassing Germany to become the biggest exporter in the world.

This was the second time that China had revised upwards growth figures for 2007 GDP, which was initially calculated at 11.4 per cent. The revision will reinforce suspicions that the Chinese authorities massage the figures to underplay the volatility of the economy, exaggerating growth when conditions are tough and underestimating when the economy is booming.

Germany’s economy has also slowed sharply and may have contracted by as much as 2 per cent in the fourth quarter, the country’s statistical office said on Wednesday.

http://www.ft.com/cms/s/0/8d9337be-e245-11dd-b1dd-0000779fd2ac.html

It hurts to be #4.

 

[Patroklos]

Man, how backwater does Europe feel right now?

 

[amadeus]

I wonder where they'd be if they stuck to Maoism.

 

[RedRalph]

when are they projected to overtake Japan?

 

[Simple Simon]

hm, if someone could cut that iron chain and ball (US) off Europe's ankle, then China would soon hear a loud WOOOOOSH!!!!! as our economy soar past theirs.

 

[warpus]

And when are they projected to overtake the U.S. ?

 

[Ecofarm]

China uses monopoly (state controlled) currency, slave labor and zero environmental law enforcement.

Someday (soon, I hope), it will all go poof.

The Chinese economy is a house of cards built with horrible things. It's the ultimate paper tiger.

 

[Patroklos]

hm, if someone could cut that iron chain and ball (US) off Europe's ankle, then China would soon hear a loud WOOOOOSH!!!!! as our economy soar past theirs.

Do you actually believe this?

 

[Simple Simon]

Do you actually believe this?

well, look a the 'financial crisis' - who pressured the world to introduce the ridiculous 'liberations' of the financial market that now eat up the saving of millions of peoples and bankrupt companies left and right? Who ruined relations with many moderate states in Asia and especially the Middle East, who now are less willing to buy in Europe and rather buy in Indochina (from fellow Muslims)? and so on......


when the US economy has a cold, Europe gets it as a flue. And the US has run around unvaccinated, kissing every desaster that came its way with open eyes and willingly. Stupid, and we pay the price.l

 

[Mise]

2007...?

If this is what 3rd place feels like, I don't think the Germans care.

 

[LordRahl]

A lot of people don't realize China was world's #2 economy at the end of 1800's...

 

[RedRalph]

A lot of people don't realize China was world's #2 economy at the end of 1800's...

and the biggest on Earth until industrialisation AFAIK

 

[LordRahl]

China uses monopoly (state controlled) currency, slave labor and zero environmental law enforcement.

Someday (soon, I hope), it will all go poof.

The Chinese economy is a house of cards built with horrible things. It's the ultimate paper tiger.

http://crucibleandcolumn.blogspot.com/2009/01/what-really-caused-chinas-success.html

 

[bathsheba666]

Man, how backwater does Europe feel right now?

Well, as individual countries, we don't feel like Europe and are content to outperform your ass on a per area basis.

As Europe, we're just bigger than you lot.

 

[Masquerouge]

A lot of people don't realize China was world's #2 economy at the end of 1800's...

Yeah. For the Chinese, what is the anomaly is that brief time period when they were NOT #1.

 

[Mise]

EU's GDP is #1 in the world. So we feel pretty good about it!

 

[Mowque]

I'm going to have to throw my hat in with Ecofarm...China has more problems then the other nations on the 'Top Ten' List do...I doubt (although i wish it would) it will be able to take the strain of anything other the explosive growth.

 

[amadeus]

Who ruined relations with many moderate states in Asia and especially the Middle East, who now are less willing to buy in Europe and rather buy in Indochina (from fellow Muslims)? and so on......

Crazy Indochinese Muslims!

 

[Bill3000]

EU's GDP is #1 in the world. So we feel pretty good about it!

If you want genuine bragging rights, become a real country.

 

[Patroklos]

well, look a the 'financial crisis' - who pressured the world to introduce the ridiculous 'liberations' of the financial market that now eat up the saving of millions of peoples and bankrupt companies left and right?

Every economy in the Western world? Not that it really has anything to do with "liberations," but I am sure you don't really care about that. Because we all know the government of Germany and France have been setting their policy in lock step with the US for the past decade...oh wait.

Explain to me how the European realestate bubble has anything to do with the US again...

Who ruined relations with many moderate states in Asia and especially the Middle East, who now are less willing to buy in Europe and rather buy in Indochina (from fellow Muslims)? and so on......

If people are not buying Europe its your own fault. It has NOTHING to do with your percieved worsening relationship betwen the US and a very select few countries.

Honestly, are you for real?

when the US economy has a cold, Europe gets it as a flue. And the US has run around unvaccinated, kissing every desaster that came its way with open eyes and willingly. Stupid, and we pay the price.l

Listen, I'm sorry Europe is small time this century, but welcome to the world economy. In that sense, the only way for Europe (or anyone) to cut the "iron ball and chain" from you is for us to disappear, then you are really screwed. Guess whose consumption is the basis for the world economy? Hint: its not Europe.

Now my tongue and cheek Euro bashing aside (I am really excited about future EU development), put up or shut up about your inane comments.