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To: Maurice Winn who wrote (41033)	11/6/2003 7:03:33 PM
From: elmatador	Respond to of 74559

<<US economy will remain nine times the size of the Chinese economy>> only if they import people. If not, it will go back to its natural size as the UK shows today. The UK shrunk back to its natural slowly. US will shrunk much faster.

To: Maurice Winn who wrote (41033)	11/6/2003 8:16:18 PM
From: Cogito Ergo Sum	Respond to of 74559

Here here

To: Maurice Winn who wrote (41033)	11/6/2003 8:32:41 PM
From: AC Flyer	Read Replies (1) \| Respond to of 74559

>>ACF, I think that's wrong. For example, Singapore went from being a backwater slum to a top country in a single generation. China, being bigger, could go even faster as they have economies of scale. South Korea did okay too. Same with Taiwan.<< Mq. You're a numerate type so I am sure you will understand my point. This all boils down to arithmetic, grade school stuff. Despite China's rapid and impressive GDP growth, it is taking place as an increment to a (relatively - compared to the USA) small base. China's GDP is approximately $1.2 trillion, while the USA's is about $10.8 trillion. If the Chinese economy grows at 10% annualized for 20 years, in 2023 Chinese GDP will be approximately $8.1 trillion. If the US economy grows at 3.5% annualized for the same period, USA GDP in 2023 will be about $21.5 trillion. None of this detracts from China's achievements. It's just that, with economic growth, if you start as far behind as China is compared to the US (i.e. an economy that is smaller than France's), then you have to grow very fast for a very long time in order to catch up. >>There needs to be a purchasing power parity consideration too.<< Yes, this PPP argument is not new. It exists in the same matrix of superstitions as hedonics. i.e. a name for a junk-math concept that allows folks to ignore objective reality. This is more in the realm of witchcraft than economics. It matters not a whit that China produces more eggs, teapots, whatever, than the US. GDP is not measured in eggs and teapots. It is measured using the common yardstick of exchangeable currencies. The PPP argument is totally spurious and a simple thought experiment shows this. Let's say you are visiting China and you can take with you as currency (a) eggs, which are worth 1/20 in China what they are worth in New Zealand, or (b) US$, which are worth the same in China as they are worth in New Zealand. What do you choose - eggs or $? See. Now, in 20 years eggs in China may be worth the same as eggs in New Zealand, but that will not occur by magic as the PPP merchants like Marc Faber imply. It will occur through the conventional economic mechanisms of investment of capital and sweat that will over time, drive up the value of Chinese output and therefore the price of Chinese labor. How can this process of accumulation of societal wealth be measured? Why, in Chinese GDP, measured with a common yardstick. China is the current mass meme, just as Nasdaq was in 1999. Everyone will tell you that China will be the leading world power in ....(fill in the blank)....years. It's just more of the same old crap. Trees grow to the sky, blah, blah, blah. >>Also, quality of life<< Now, you've hit on something. China has a rapidly developing set of environmental challenges, brought about by a growth-at-all-costs mentality. These kinds of problems don't really get solved until a society is wealthy enough to appropriate the resources to address them. China is not there yet.

To: Maurice Winn who wrote (41033)	11/6/2003 9:11:47 PM
From: Joe S Pack	Read Replies (1) \| Respond to of 74559

ACF, I think that's wrong. For example, Singapore went from being a backwater slum to a top country in a single generation. China, being bigger, could go even faster as they have economies of scale. South Korea did okay too. Same with Taiwan. China could go faster than all of them. Which would be very impressive. Also, GDP is an odd thing. We are theoretically poor here, with a rotten GDP, but life is pretty good. There needs to be a purchasing power parity consideration too. Also, quality of life. Also some things figure in GDP but have zero value in that the activity would be better not to exist. Digging holes and filling them in helps GDP for example. Producing bombs then blowing them up is good for GDP but useless [in the case of Vietnam but may yet be useful in the case of Iraq]. I need to investigate China more closely. It didn't take Britain many decades to go from best of all to an also-ran. Things happen faster these days. Much faster. Mqurice I second that this progress thing sometimes move faster than we can hope for. Who would have thought 15 years back China will be paying for Mr. Bush's adventures today. We are living in a pixalated world and these pixels move (rather illuminate) faster than we would like to.