September 23, 2002 at 8:59 pm
According to Dow Jones, growth is accelerating in China during a world-wide down cycle.
The implications are enormous.
The most obvious are:
1. China’s internal markets are actually pushing growth when the world’s in an economic slump,
2. China’s investment environment has developed to a point where it can attract increasing foreign investment even when investment capital is scarce (normally, sustainable investment happens only with developed economies like the US; FDI to 3rd world economies tend to follow boom/bust cycles where investment occurs only when there is excess capital),
3. An economy expanding during a down-cycle acts as an engine of growth and becomes a magnet for its trade partners; the recent talks of China and ASEAN over a common free trade zone in the next decade might portends the rise of a new economic block in East Asia.
And if the Chinese economy is growing now, what will happen when the world gets back on track? We might be at the beginning stage of probably the most massive economic takeoff in human history.
Or this could be all bs and China’ll collapse under the wieght of her insolvent banks and the stifling hand of a ruling party intent on keeping power.
http://story.news.yahoo.com/news?tmpl=story&u=/dowjones/20020923/bs_dow…
China’s GDP, Foreign Investment Growth Seen Accelerating
Mon Sep 23, 8:15 AM ET
(This article was originally published Friday)
WASHINGTON -(Dow Jones)- China appears to be exceeding expectations for GDP ( news – web sites) and foreign direct investment growth this year, a group of economists and Asia specialists said Friday.
Contrary to an anticipated slowing this year, China’s economic growth has picked up since the first quarter and is likely to be close to 8% in 2002, compared with 7.3% last year, according to Pieter Bottelier, a professor at the Johns Hopkins School of Advanced International Studies.
Bottelier, a former China specialist at the World Bank ( news – web sites), attributed the growth to higher-than-expected foreign direct investment, rapid export growth despite stagnating global trade, fiscal stimulus and consumer demand.
“On current trends, it is likely China will become the world’s largest manufacturing country – in terms of gross output value – in about a decade,” he said at a National Press Club forum on U.S.-East Asia economic relations.
Foreign direct investment in China during 2001 rose nearly $6 billion from the previous year to $47 billion, even as global FDI dropped to less than half its 2000 level, according to a U.N. Conference on Trade and Development report released Wednesday.
China’s Ministry of Foreign Trade and Economic Cooperation estimates foreign direct investment in the first eight months of 2002 reached $34.4 billion, up 25.5% from the same period in 2001, and will likely reach a record $50 billion for the full year, according to the ChinaOnline news service.
Initial data suggest contracted-for FDI will also soar this, according to Robert Kapp, president of the U.S.-China Business Council. Kapp and other panelists cited the announcement this week that Nissan Motor Co. would invest $1.3 billion in Chinese manufacturing as an example of continued strong growth.
China’s emergence as a regional powerhouse has caused some concern in Japan about the loss of its role as an economic leader in Asia as well as anxiety about the “hollowing out” of Japanese industries, said Edward Lincoln, a senior fellow at the Brookings Institution.
But Lincoln said concern about losing manufacturing to China has been somewhat exaggerated, as most of Japan’s foreign direct investment in recent years has gone to manufacturing in the key U.S. and European markets.
http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020913/ap_wo_en_po/…
ASEAN and China agree to start cutting tariffs as precursor to free trade zone
Fri Sep 13, 6:49 AM ET
By REBECCA THURLOW
BANDAR SERI BEGAWAN, Brunei – Southeast Asian countries and China said Friday they intend to start cutting tariffs on certain products by the end of 2004 as part of plans to create a comprehensive free-trade zone in the next decade.
Ministers from the 10-member Association of Southeast Asian Nations and China’s Minister for Foreign Trade and Economic Cooperation, Shi Guangsheng, agreed to implement the package over a period of three years starting before Jan. 1, 2004.
However, a decision hasn’t yet been made on what products will be eligible for the scheme, the ministers said in a statement following talks Friday on a proposed framework agreement for closer economic relations. Negotiating a free trade area covering trade in goods, services and investments comes under that umbrella.
ASEAN economic ministers, who have watched China lure away foreign investment, said they hoped the free-trade area would help open up China as a market for their goods and services.
ASEAN groups Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.
Malaysia’s Trade Minister Rafidah Aziz said Thursday that most of the items China and ASEAN had agreed on for inclusion in the early harvest scheme were agricultural products, though China was also interested in other goods, which she did not identify.
ASEAN ministers have viewed a draft list of products for inclusion and would discuss them again at a meeting in Singapore in October, said Brunei’s Industry Minister Abdul Rahman Taib.
In their statement, the ministers said they hoped the final list would be agreed on at the Singapore meeting, in preparation for ministers to sign the framework agreement at a meeting in Cambodia in November.
Negotiations over the broader free trade agreement ? to cover goods, services and investments ? would begin in 2003, the ministers said.
China’s Shi said the agreement will result in a “win-win and mutually beneficial cooperation situation” between China and ASEAN.
Singapore Trade Minister George Yeo said Friday that China’s growth presents a challenge for Southeast Asia ? particularly for industries facing increased competition from factories in China ? but China’s growth also presents “enormous opportunities” for the region.
By: Arabella-Cox - 27th September 2002 at 19:08
RE: China’s accelerating growth, implications?
>very interesting post vertex.
>
>since u can understand that soviet propaganda probably
>manipulated the turth, then if u extend that logic, it is
>entirly possible that america and western governments did
>the same. especially during the cold war when everyone was
>trying to gain the moral high ground.
>
>im sure u can find alot of ‘prof’ to show that i am wrong,
>but i can do the same. the simple fact is that every single
>country in the world writes history in a slightly different
>way to everyone else, in which the role of their country is
>enthisied or ‘enhenced’, that is y it is practically a waste
>of time to discuss history on an interational forum such as
>this one, where everyone is tought slightly differently, so
>lets just say that germany and japan would not have been
>defented so comprehensively if improtant members did not
>join in the war.
>
>WWll is the best example of humanity as a whole forgeting
>our differences and jioning forces to fight a common enemy.
>and ultimitly save the world from ruthless nazi occupation
>and oppretion.
>
>we all did good, cant we just leave it as that, give
>ourselves and each other a pat on the back, instead of
>fighting abt who did what?
Isn’t that what i just wrote about? maybe something was lost in the English translation for you. If you read it slowly, that’s exactly what i meant, discuss the events and criticizing those who put too much emotions into who’s the king here, sure you can claim for the sides you “favor”, but that much emotion(i’m not talking about you plawolf on the emothion side), humm…..
By: plawolf - 27th September 2002 at 17:51
RE: China’s accelerating growth, implications?
very interesting post vertex.
since u can understand that soviet propaganda probably manipulated the turth, then if u extend that logic, it is entirly possible that america and western governments did the same. especially during the cold war when everyone was trying to gain the moral high ground.
im sure u can find alot of ‘prof’ to show that i am wrong, but i can do the same. the simple fact is that every single country in the world writes history in a slightly different way to everyone else, in which the role of their country is enthisied or ‘enhenced’, that is y it is practically a waste of time to discuss history on an interational forum such as this one, where everyone is tought slightly differently, so lets just say that germany and japan would not have been defented so comprehensively if improtant members did not join in the war.
WWll is the best example of humanity as a whole forgeting our differences and jioning forces to fight a common enemy. and ultimitly save the world from ruthless nazi occupation and oppretion.
we all did good, cant we just leave it as that, give ourselves and each other a pat on the back, instead of fighting abt who did what?
By: Arabella-Cox - 26th September 2002 at 21:09
RE: China’s accelerating growth, implications?
[updated:LAST EDITED ON 26-09-02 AT 09:14 PM (GMT)]I disagree on the German Soviet part. There’s no doubt that the Soviets did a lot to inflict damage on the Germans. But, what was controversial during WWII, and still is controversial today until the war on Yugoslavia is the question of airpowr and “strategic” bombing. You can talk about the Barbarosa of the 43, but what about the North Atlantic supply line and the daylight strategic bombing of Europe. I remember a statistic showing that the RAF with their night bombing didn’t really do much against the Germans and during those days the Americans with their daylight 150-200+ bomber formations were viewed as suicidal. Yet, post war analysis showed that it seriously inflected “strategic” damage against the Germans to wage the war. It was accepted by some academics that if the war continued on for few more years due to the lack of “strategic” bombing and Hitler’s full array of advanced weapons becomes operational (not to mention an atomic bomb) things might have gone totally different. Of course mights and would haves are always academic. Again, the strategic bombings significantly shorten the duration of an already long war. Of course it is only right to teach about all sides during WWII, not only about Allies or the US. But the question is, you are a western educated person and here you are arguing against basically not teaching and telling people enough about what the Soviets did. That’s fine. But, do you have any clue on just how much Soviet propaganda is in their own country on how little the Western government did and it was the Soviets who were the saviors. So, basically, i don’t understand your extremem passion on the who gets more credit part, instead we should discuss on the event itself. As to the Normandy insinuation up there, will if you write English like that that’s pretty much saying the US got the easiest spot. Because besides the countries you’ve named who else was there in significant numbers?
The beginning of the end for Hitler was N.Africa where the momentum shifted (strategically) and swun around against Hitler. From then on, he receive failure after failure in the strategic sense. Of course they win battles, but lost the war. Same as Japan, Battle of Coral Sea was like the analogy to N.Africa and Barbarosa was like Midway. Before those, they were unstoppable. Philippine Sea is like Normandy, basically game’s over…except the matter of time. Hind sight of course, hind sight.
By: BearCat - 26th September 2002 at 20:09
RE: China’s accelerating growth, implications?
>They didnt??? I can think of quite a few “meat grinders” in
>Korea and Nam. An other reason is that US didnt border
>Japan or Germany.. if you had Panzer divizions rolling over
>your land.. you would be forced to draw a line and get into
>a meatgrinder.
>
Vietnam was hardly a meatgrinder. It was a confused police action where the military had its hands tied by the politicians. We lost 55,000 in 10 years. If the US had approached Vietnam like it did with Japan, the war would have been over in two years with minimal casualties like Iraq.
Korea was a meatgrinder. We lost the same amount as Vietnam in a year and a half. We ran into another major power there and again we weren’t allowed to persecute total warfare like we did with Japan and Germany.
But heck, losing 50,000 troops against the PLA and the N. Koreans over two years in constricted theater jammed with millions of troops is nothing like the Russians losing close a half million dead at Stalingrad or Germans losing a 100,000 at the Ardennes over two months.
Even at the Battle of the Bulge, the US lost at most 18-19,000 dead. And only about 7,000 in the initial stage before the idiotic frontal counterattacks prescribed by Montgomery (he wanted general advance with troops along the entire front while Patton wanted to punch a hole through one side of the Bulge with armor and envelop the Germans from behind).
Noth Korea and the Ardennes had enemy armor rolling over American lines. The casualty rates were still MUCH lower compared to the Red Army and the Wehrmacht.
What’s more, no other nation in the world back then, not even Russia, could have taken Iwo Jima, Okinawa or Guadalcanal. Those were full-scale air-land-sea battles with long logistics lines. No matter how bloody those were, the US always inflicted more casualties than it suffered.
>Ad finaly by the time Yanks and the ontorage had landed on
>the french soil, the main battles have been alredy fough,
>the german force cracked and on the retreat on the easter
>front. After Stalingrad, ang Battle of Kursk germans had
>alredy lost the war, they never advanced one foot eas.. but
>just retreated. And both of these battles happend more than
>a 1 year before famed landing which west propetuated as
>beginning of the end of the Reich.. BULLSHIT. The beginging
>of the end for hitler was not operation Overlord but
>Operation Barbarosa.
>
I’m not disputing that. The deathknell of the German Army was at Kursk. But what we did save you from is the fate of Eastern Europe.
Without American involvement, Paris would be liberated by Red Army troops.
>Finaly… the Alies faced only the fraction of the troop Red
>army faced, and the best men and the armour of germans went
>east in far greater numbers then they did west… and still
>red army was first into berlin. So how about we give them
>some deserved respest .. OK “Partneer”?
Yes, the Red Army of 1939-45 does deserves some respect. But certainly doesn’t earn any points for the way it threw away the lives of its men.
Except for Kasserine Pass and Anzio, during most encounters Americans killed Germans to the tune of about 5 to 1. The Red Army on the other hand, always suffered more casualties than they caused even in the last years of the war when the Germans were in disarray.
Even if the best German troops had faced Americans in late 1944, it would still have resulted in the slaughter of German troops. In the Falaise Gap the United States annihilated 19 Wehrmacht and SS divisions, including some of the best German formations of the war.
Remember the “Highway of Death” in Kuwait? The USAAF left a bigger version in France. Thousands of burnt out panzers, vehicles and dead Germans littering the road out of Falaise for miles on end.
The Germans were probably the best soldiers man for man. The best military, though, belonged to the US. Without question.
By: plawolf - 26th September 2002 at 18:23
RE: China’s accelerating growth, implications?
sorry BC, but i’ll have to disagree with u a bit there.
even if germany had stopped af france, america would still have gotten involved after pearl. but if that was the case, it would have been much more likely that america only decleard war on japan and maybe send some troops into britain to ‘protect’ it.
there would not have been a D-day landing, the US would just occupy japan and call it quits. and the cold war might have been played with 3 parties instead of two, the outcome of which is very hard to say.
but i agree with you on the rest.
on the topic of china, i dont agree with what a few of u have said. china opening up to the world was as much a move to help build the ‘political ifastructure’ u were talking abt.
if you know china well, then u should now that coruption is one of our biggest problems, and even though the chinese lardership has more power then their western counterparts, they still find it difficult to institute change. so by opening up, it is hoped that western techniquics and standards will force change otherwise not possible. in other words, china is trying to use the regulating powers of the WTO to help it intitute reforms that will allow it to remain in power in the 21st century.
also, the logic behind ur ‘big brother, little brother’ example is not entirly solid. the world which we live in, the world u, america effectively created, is a place where every oginisation has to contiously grow in order to survive. so it is a little ironic that u would suggest that america has effectively stopped growing, and that every other country will too at some point in time.
ur point abt china’s growth being ‘natural’ is kind of right, but u also kind of missed the point that china has shown in the post few years in particlar, that its sustained growth is a little more then just ‘ a natural phnomanon’. just take the asia economic crisis of 96, the economies of s.korea, indinisia, philipins etc( coutries that also should grow by default) all serfered greatly, but china’s economy got through the whole thing reletively unscaved. that shows that china’s ‘economic mirical’ was as much a result of good policies as it was by ‘default’.
what most ppl miss when analysing china’s economy is the fact that china’s leaders stay in office for decades as oppose to years in the west.
if u know a bit abt economics, you should know that the biggest obstical to suatained economic growth in western countries is the reletively short ‘lifespan’ of governments. this means that pretty much all western governments are unwilling to invest in long term projects, which are vital to susatined growth, because they wont be there to reap the benefits in 10, 20 years time.
this means that china has an inheriant advantage over pretty much all it rivals in terms of economic planning and development. but that does not nesserily mean china will overtake the US. just like china having a long term planning advantage, america also has it inheritant advantages over the rest of the world, as do many other countries.
the state of the world economy in the not so distant future is by no means set, countries have to be able to fully untilise their specific advantages to try to get ahead. just because china and america has a reletivly bigger advanyage does not mean that they will be the most succesful two, full stop. both countries will also has to work hard to stay ahead of the competition, who knows, if the EU gets it act together, we may see a ‘tripolar’ economic world in 20, 30 years time. if the world hasnt been blown up by then that is.
By: BearCat - 26th September 2002 at 16:28
RE: China’s accelerating growth, implications?
“What bugs me a lot is when I read post such as “You guys won’t unable to survive without our protection” or this kind of stuff.”
Well, I’ve never said that. But to be truthful, if Germany had stopped after France in 1940 and had treated England as a nuisance, today’s Western Europe would consist of one big Germany and Spain and Portugal. America would not have gotten involved even after the Japanese attack on Pearl Harbor (as long as Hitler was not dumb enough to declare war on the US).
Britain would be an American protectorate without any influence on the mainland.
There was no question of survival for Holland, Belgium, France, Norway, Sweden and Denmark under Germany rule. There was absolutely no intention on the part of the Nazis to eliminate the populations or cultures of those countries as they had intended for the Jews and the Slavs. In fact, the Germans of that period (it wasn’t just Hitler, he was democratically elected) actually believed they were protecting Western European culture.
As for sovereignity, well, these same states are giving it up now to the EU. There is little doubt in my mind that the Germans will eventually dominate Europe, in spite of French protests to the contrary. Another generation and the shackles of guilt that had kept Germany quiet and subdued would come off. They would then take the leadership role that really had been theirs since the 1960s.
By: JAG - 26th September 2002 at 16:25
RE: China’s accelerating growth, implications?
They didnt??? I can think of quite a few “meat grinders” in Korea and Nam. An other reason is that US didnt border Japan or Germany.. if you had Panzer divizions rolling over your land.. you would be forced to draw a line and get into a meatgrinder.
Ad finaly by the time Yanks and the ontorage had landed on the french soil, the main battles have been alredy fough, the german force cracked and on the retreat on the easter front. After Stalingrad, ang Battle of Kursk germans had alredy lost the war, they never advanced one foot eas.. but just retreated. And both of these battles happend more than a 1 year before famed landing which west propetuated as beginning of the end of the Reich.. BULLSHIT. The beginging of the end for hitler was not operation Overlord but Operation Barbarosa.
Finaly… the Alies faced only the fraction of the troop Red army faced, and the best men and the armour of germans went east in far greater numbers then they did west… and still red army was first into berlin. So how about we give them some deserved respest .. OK “Partneer”?
By: Hand87_5 - 26th September 2002 at 08:25
RE: China’s accelerating growth, implications?
I didn’t say that American received easy beaches. I said that other armys didn’t receive the easiest. It make a difference.
We know the value of american sacrifice during those events and will certainly never forget it.
What bugs me a lot is when I read post such as “You guys won’t unable to survive without our protection” or this kind of stuff.
I have no intention to offend anybody but just trying to have a fair debate.
By: Arabella-Cox - 26th September 2002 at 00:50
RE: China’s accelerating growth, implications?
> But even Omaha was light in comparision to Stalingrad.
>There were about 2,500 casualties at Omaha with a little
>less than half of those being KIA. This was in spite of the
>massive numbers involved in the operation.
>
> Americans simply don’t throw their troops into meat
>grinders unlike the Red Army.
thanks, i was about to reply in anger with the kinds of insinuation there about American receiving an easy beach on Normandy. That’s where we actually got the respect because prior to that the British were the forefront on the N.Africa campaign and America only fight mainly with airpower over Europe..at a horrendous loss of airmen too. 20 missions remember? All when America itself is not at desperation (please the Japanese have no chance after Midway).
As to not sending men into “meat” grinders, that’s why we were called soft because we value life (ok, American life) more.
By: BearCat - 25th September 2002 at 17:07
RE: China’s accelerating growth, implications?
>Cyrus,
>
>I guess that your lecture of WWII history is quite “US
>centric”.
>Yes USA did participate and brought a huge contribution to
>victory but please Many other paid an heavy contribution in
>term of causulaties.
>
>Let me give 2 examples:
>
>Stalingrad battle. The red army fought the Wehrmacht and
>loss millions.
>
Not millions but close to a million. The Germans lost over 220,000 from Paulus Sixth Army in casualties and prisoners.
>D-Day in Normandy: American corps were there but many other
>who paid a lot and didn’ received the easiest beaches to
>land such as:
>Aussies , NZ , Canadians and Brits.
The vast amount of casualties on D-Day were suffered by Americans and much of those on one stretch of beach called Omaha.
But even Omaha was light in comparision to Stalingrad. There were about 2,500 casualties at Omaha with a little less than half of those being KIA. This was in spite of the massive numbers involved in the operation.
Americans simply don’t throw their troops into meat grinders unlike the Red Army.
By: Hand87_5 - 25th September 2002 at 13:12
RE: China’s accelerating growth, implications?
Cyrus,
I guess that your lecture of WWII history is quite “US centric”.
Yes USA did participate and brought a huge contribution to victory but please Many other paid an heavy contribution in term of causulaties.
Let me give 2 examples:
Stalingrad battle. The red army fought the Wehrmacht and loss millions.
D-Day in Normandy: American corps were there but many other who paid a lot and didn’ received the easiest beaches to land such as:
Aussies , NZ , Canadians and Brits.
By: JAG - 25th September 2002 at 13:05
RE: China’s accelerating growth, implications?
Nobody Said they are becoming THE superpower (and thanks haven 4 that).. but with population of 1.5Bn rapidly developing economy, and deffence force.. they will become one of THE top 2 powers,with in 20 years…. that is for sure.
By: Cyrus_666 - 24th September 2002 at 20:35
RE: China’s accelerating growth, implications?
“panic”?
Not at all. You must remember that during that 15-20 years we bailed the Euros out of WWII while also defeating Japan…after that, America became the great economic power of the West by default because the other great powers were now in shambles (which, by the way, America bailed them out of as well). So, tell me, what great event is going to propel China into an economic power by default? The only one I can think of is one where the entire world is destroyed…and thus eliminating their opportunity in the process. 😉
By: JAG - 24th September 2002 at 18:34
RE: China’s accelerating growth, implications?
“”Hmmmmm….”insolvent banks”?….now where have I heard that before??? Ah yes, America 1929…jut before the great depression””
But then 15-20 years after the USA was greates power in the world.. steam roling over powerfull “EMPIRES” of that age ,,,,, do i detect signs of panic uder that mask of sarcasam ?? 🙂 😉 }>
By: Arabella-Cox - 24th September 2002 at 08:39
RE: China’s accelerating growth, implications?
[updated:LAST EDITED ON 24-09-02 AT 08:42 AM (GMT)]you know what’s much more important than all this growth bs? A solid infrastructure and protocols for the future. I’m not talking about building highways and sky scrapers kind of infrastructure. I’m talking about applying the rules that doesn’t undermine itself. Growth? What is growth. If N.Korea opens today, it’ll see growth probably in the triple digits for the next ten years. Why, because they are so far behind and the only reason they are there are politics not ability. Many third world countries lack expertise, but countries such as China and N.Korea was held back in the last 50 years due to politics. Of course they’re going to grow, otherwise it worse than lame. But, your younger brother who is 2 feet shorter than you is growing and you’re not, that’s the proof that he’s going to be taller than you in the future? He better grow or else…that’s extrememly height challenged. Same concept. The problem i have is you always have these people looking only at growth, without looking at foundations, and make claims such as one day they’ll be this and that. What do you guys think of the Phillipines as a economy? It was once growing at such a high rate and everybody had high hopes. Maybe some Chinese will get pissed at this, and if they do they totally missed the point. Basic calculus, the time derivative of a vertical line at 0 is infinite “rate”, but keep in mind you’re still at 0. Japan stopped growing, but they are one damn rich country.
By: Cyrus_666 - 23rd September 2002 at 21:06
RE: China’s accelerating growth, implications?
Hmmmmm….“insolvent banks”?….now where have I heard that before??? Ah yes, America 1929…jut before the great depression. }>