Haim, this is incorrect. China's GDP was $997 billion in '99, 11% of the US economy roughly. per capita GDP was $790 in '99, which is 2,3% of that of the US. so in absolute as well as relative terms this is by no means a big economy. i agree it WILL be one day though.
your figure of $5 trillion is an artificial figure arrived at by applying purchasing power parity to the data. this is clearly misleading, as many prices are government controlled and subsidized in China. even thus adjusted, per capita GDP would only amount to 12,5% of that of the developed nations average. 30% of the population live on less than $1 per day.
it does not have the makings of an economic locomotive that could help pull the world out of an economic slump, especially as its most thriving sector is exports, which is likely to suffer greatly if the US downturn intensifies.
and that's not even considering the huge economic problems besetting China, from its defunct, but extremely large, state owned industries (imagine a sector that is bankrupt for all intents and purposes employing over 200 million people), the banking system, which is basically in tatters, high trade barriers, no rule of law, and huge social problems, as the giant rural population is basically unable to make a living from its crops, but is also not allowed to sell land and move on.
but i do agree that there is POTENTIAL. 2 or 3 decades from now, China could be a really important player in the global economy. |
