I recently read in The Guardian an article by enthusiastic orientalist Martin Jacques in which he says that The Economist has just predicted that China’s GDP, measured in nominal dollars, will will be the world’s largest by 2018. Earlier estimates, he says had China becoming the largest economy in the world by 2027
I have always been a little skeptical about the 2027 claim, not that it is implausible, let alone impossible. It is just that given how much we would have to assume about the sustainability of Chinese growth, about the likelihood of current GDP numbers not having been vastly inflated by an over-investment boom, and about the instable range of political outcomes, it seemed to me to be a prediction about as valuable as the world-beating predictions about the USSR in the 1960s or Japan in the 1980s.
Still, this 2018 prediction deserves I think more than a little questioning — it requires that nominal Chinese GDP growth in dollars outpace nominal US GDP growth by 12% a year. I know that in the past The Economist has tended to be a little less skeptical than some others have been about the sources and components of the Chinese growth miracle (not always — different writers at The Economist seem to have very divergent opinions on the subject), but this is a pretty aggressive prediction, more in line with what I would expect from an investment bank, or from a consulting company that helps foreigners access the Chinese consumer market.
I believe some people from The Economist do read my blogs from time to time and so I am wondering whether we could set up a friendly bet — not for too large stakes, please, since my resources are limited, but just so that we can both keep up a sporting interest in the economic news over the next few years. I would like to bet that by the end of 2018 China will not be the largest economy in the world.
If I win, perhaps The Economist could invite a very cool underground Chinese band of my choice to perform at their next big conference, whereas if I lose I could buy four-year subscriptions (student rates, please) to a group of Peking University freshmen. Everybody would end up feeling pretty pleased with themselves no matter who wins, right? So?
Michael, I know you are being playful. Martin Jacques’s piece is more about how UK has not been able to participate the China boom, and what it should do going forward, than predicting which year China would be the largest economy in the world. The chinese leadership recognizes this completely that even China surpasses the U.S. as the largest economy in the world, whenever it may be, it is still not a wealthy country based on per capita income and average living standard. 30 years ago when Deng opened up the country, absolutely no one, including Deng himself, were able to predict, or more precisely, dare to predict what China has achieved. it would have been wildly optimistic even to think about the possibility of what has happened. 2018 looks unrealistic to me, but we’ve been surprised enough times in the past.
Couldn’t a lot of this be made up in Yuan/$US exchange rate flucuation? Imagine the Yuan is 25% overvalued. To get to the same nominal level, the difference is closer to 7%, assuming the Yuan goes to today’s ‘correct’ value. To some degree, assuming a continued China net export to US, doesn’t the Yuan have to continue to increase in value relative $US?
Well, I reckon over-simplification has limits, and Martin Jacques’ over-simplification of The Economist’s estimation he is referring to is off the mark. “2018″ is the result of one of several scenarios, see http://www.economist.com/blogs/dailychart/2010/12/save_date
All the caveats attached being taken into account, it amounts to The Economist agreeing with you. Nevertheless, I’ll try to incite Gady Epstein to accept the bet on behalf of The Economist. Just for the ensuing fun.
I am willing to take a modest $100 bet on this.
I have a blog nextbigfuture.com with a combined RSS and web page views of over 1 million per month.
I am willing to bet that China will exceed the US GDP on a nominal basis by Dec 31, 2018.
Prof Pettis,
Forget Chinese growth for a second what are your estimates for global growth until 2018?
Thanks
BTW – I would want it to include Hong Kong and Macau
Just a tiny bit of edge.
Hi Michael,
How fun. I’ll help underwrite your side of the bet. All i ask if you win is a free beer at D-22.
I suspect the economist is talking PPP here. So nominal changes and currency conversion is not relevant.
Just some background for me and my willingness to take the bet.
1. I have been predicting that China would pass the US economy on a nominal basis on or before 2020 since 2006. By 2008, I had settled on about 2017 or 2018.
http://nextbigfuture.com/2012/03/reviewing-my-old-predictions-and.html
2. I had 156 mostly technological predictions made as guest article at nanotech-now
http://www.nanotech-now.com/products/nanonewsnow/issues/033/033.htm#Wang
China second largest economy in straight currency conversion measures, 2013-2015, I did not expect Japan to do as badly as it did.
China largest economy in PPP (Purchasing Power Parity) terms 2009-2012
by various measures of PPP, this was already correct. 2012 seems right based on Penn World Tables 7.0
some calculations of PPP for China have it 70% higher than the World Bank figures
http://nextbigfuture.com/2012/03/economist-arvind-subramanian-calculates.html
A Credit Suisse study suggest that China has a larger hidden economy
http://nextbigfuture.com/2010/08/credit-suisse-study-suggests-there-is.html
The correct PPP numbers and the correct hidden economy numbers tell me that China’s economy is larger than what is reported. Also, the actual imbalances are less.
I am aware that China economy has to stay on the track of high growth for the next 5-6 years to win this bet. I would prefer a more certain bet that used 2020 to remove elements of chance out of it, but I am willing to make the 2018 bet. It probably will happen 60-65% chance. The US economy could do better than expected over 3.0% per year and that could screw up China passing.
Nextbigfuture.com
Alexa ranking 58,000 (top 31,000 in the USA)
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i like the bet, and i am on your side.
there are so many reasons why there is so much hype about the ‘threat posed’ by china, that it is tiring to choose which one to debunk.
i hope the economist takes the challenge like a gentleman would, just make sure you don’t pull an alexander hamilton later on…
I think you’ve made the right bet, but I wanted to ask: how long do you foresee the U.S. having the largest economy? Are you saying that China simply won’t reach parity with the U.S. in the foreseeable future, or that it will only do so at a time after 2018?
Will you accept my offer to take on the bet that you were initiating ? Although you wanted the Economist. They have not accepted yet. I am willing to take the other side. I will even throw in an article to increase awareness of the band that you mentioned.
JayB, actually Jacques seems to endorse the prediction, but the main point is not whether or not he does but rather whether the prediction is credible, and I think it is pretty far from credible.
Winstongator, the problem is that China’s GDP growth rate is not independent of the exchange rate. Presumably a stronger currency means slower growth, or else why bother intervening?
RS, I am nowhere near smart enough to predict global growth rates out five years, and anyway am too respectful of the possibility of discontinuities to think such predictions have much value, but I will argue that most of the basic global imbalances from before 2007-08 have not yet reversed, and in some cases are worse than ever, so I am not expecting much in the way of global growth.
Hua Qiao, a free beer at D22 is impossible since I closed the place in January, but my new music space will open May 1.
Alex, one of the main reasons I reject the idea that China will be the largest economy in the world in 2018 – aside from the sheer silliness of the assumptions we need to make to get there – is because the whole business of predicting these things is absurd, as anyone who has any familiarity with the history of such predictions knows. During the 20th Century there have been at least five times during which a new #1 has been predicted, and at least four of them were considered virtual certainties, and yet the only time it happened was with Europe, when the EU became larger than the US. That turned out to be less than permanent. Because most people insist on seeing this question as a race between China and the US, anyone who doubts that China will “win” is assumed to believe that the US will “win”, but I want to repeat that I assume no such thing. The whole exercise is, I think, just silly, especially considering that China’s GDP measures ignores capital misallocation, NPLs and environmental degradation, which together may mean that Chin’as GDP is actually 20-40% smaller than the nominal GDP numbers suggest (and much smaller than the PPP estimates, which are almost worthless anyway).
Brian Wang, you miss the point of my posting. I am not doing this because I need ways to earn a little extra cash. I just want to make it clear how absurd I think the prediction is.
Michael,
For many years The Economist has been very tongue and cheek about anything involving Chinese statistics, including growth rates. And their regular readers know that. Of course we all believe that China is a growing country… but… well… you know. And their regular readers have read their articles on Chinese oil and electricity consumption, inbound freighters, etc, proposed as proxies for measuring GDP growth.
But let’s be serious, China’s bureau of statistics will not let the growth rate go below 8%. Perhaps now 7.5%. And that is my impression of The Economist’s dry wit.
How about just an official bet but with no money on the line. My predictions have been tracking pretty well for 6 years. Your statements and predictions are public. So you have said 2018 is absurd and 2027 is plausible buy unlikely. If the actual pass does occur by 2021 these internet statements will come back bet or no bet. What if the Economist called.your bluff then ? You would take it then only because you would be able to trumpet engaging the Economist and getting into an article in the magazine ?
I predicted China would become the number two economy (nominal basis) in 2010 back in 2007. I had to move the date up from my 2006 prediction.
How do you think the european part of your predictions are doing from last year ?
* European politics will continue to deteriorate rapidly and the major political parties will either become increasingly radicalized or marginalized.
* Spain and several countries, perhaps even Italy (but probably not France) will be forced to leave the euro and restructure their debt with significant debt forgiveness.
* Germany will stubbornly (and foolishly) refuse to bear its share of the burden of the European adjustment, and the subsequent retaliation by the deficit countries will cause German growth to drop to zero or negative for many years.
It looks like Germany is moving step by step to pay what they have to.
The Europeans did not even boot out Greece. So it looks like they are keeping Spain and Portugal and Italy.
But things are still fluid, perhaps you have a different interpretation or timeline.
In two or three years we can more conclusively revisit this and your China predictions from last year.
I believe that is good for the world as a whole that China, as well as India and Brasil, become more and more important economic players regardless of their nominal GDP numbers. Far more interesting than the GDP would be to see if China can build a gigantic social security net to benefit its citizens.
Anycase, since I support Mr Pettis position in the bet, I think I should have a share in this bid. A 4-year subscription would be fine with me.
In reviewing Mr Jacques book, ‘When China Rules The World’, Seth Faison says, “his (Mr Jacques’s) predictions about the future get more flimsy” as he gets more specific and another reviewer on the same Amazon website who says that he “was particularly annoyed at the attitude of the author and his assumptions about the readers assumptions.” while at another point maintains that “the author is inconsistent at times and does not draw conclusions based on the evidence he presents rather than the feelings that he has about the subject”.
Both these opinions would appear to substantiate my view that on the basis of a body of statistics supplied by the IMF and Goldman Sachs Mr Jacques assumes a little too much. Indeed, Wen Jiabao’s Government Work Report in March last year, would appear to recognise that further unrestrained growth at the expense of the environment and social harmony, is unsustainable and that it will lead to a disaster for China and, by implication, for the rest of us.
The obsession with gdp growth obscures the really important issue, which is economic justice. Growth is not associated with justice.
Relax, Brian. Pettis has probably the best track record of predicting of anyone out there, especially on China, and unlike you his predictions usually go against conventional thinking. The number of people who predicted that China would be the second largest economy in the world is even larger than the number who are predicting it will be the largest. But I don’t think many people understand what has driven the growth and why it sn’t unsustainable. You are like one of those guys who “predicted” in 2005 that US real estate would keep going up for many more years who is immensely proud of himself in early 2007 for getting it right.
I think this is kind of a silly argument, based on the way the Chinese look at it. Essentially they could decree tomorrow that on Jan 1, 2018, the Chinese economy will surpass that of the US. And it will. Granted, they will have to take on enormous amounts of new debt and will need to build countless bridges to nowhere to get that number, but that hasn’t stopped them before, has it? How much unnecessary investment has gone into keeping above the magic 8% growth rate number?
It’s not at all sustainable and it may be grossly wasteful. But these are stats based more on the will and desires of the leadership rather than the performance of the economy. So, it doesn’t seem like a fair shake for Prof Pettis, but hey, it’s his bet.
Anyway, it comes down to whether or not the government would take on more unnecessary risk and economic distortion in order to have bragging rights as “the world’s largest economy”. Based on what I’ve seen, I believe they would do this, regardless of the long term consequences.
The conventional wisdom was not that China would pass the USA in 2017-2020 on a nominal basis back in 2006. Back then it was 2040 and then 2027 and now there are others agreeing with me it will be 2018-2020. I have public blog posts showing my projections.
I also had accurate predictions of a solar sail in space by now. Which happened with the Japan Ikaros solar sail. I also was right on a greater than 100 qubit quantum computer having commercial sales. dwave sold a 128 qubit system to Lockheed for $10 million in 2010.
Not conventional wisdom because conventional people do not know those things have happened.
@Brian 25
I think you’re too hasty to act as if the “2040 and then 2027″ line of thinking has been debunked, and to assume at the same time that there is some profound meaning underlying those same dates being “moved up” to “2018-2020,” or that they have any gravity in the first place.
Also, you are hardly alone in proposing an increasingly aggressive timeline for the American sorpasso. You definitely can’t catch Arvind Subramanian, who proposes that China is already larger than America (Sean Rein has also hinted at this possibility)
arvind is basing his on purchasing power parity and not nominal exchange rates. I do agree with him and the Penn world tables that China passed on a ppp basis. I also think that there is the larger black market economy of hidden bribes. I think the individual consumer economy is larger than the 40% or 35% level because of the black market. More services occur in the hidden economy. Also. I know that many people in China use companies for their individual consumption.
Brian, I predicted that airplanes were going to get bigger and bigger. I also predicted that when China became the second largest economy in the worked Japan would become third. I predicted the European debt crisis. Finally I predicted that Starbucks would do very well in China. As you can see these are all based on a clear understanding of the global growth model and on Federal Reserve policies since the early 2000s. I want Pettis to make a bet with me that there will indeed be one more Harry Potter movie. Its all in my blog. I can write an essay in my blog that will make him a very famous economist if he agrees. Plus $100 dollars if he wins.
Yet Pettis did not offer the Harry Potter bet. Pettis was the one seeking to make a bet that China’s economy would or would not pass the USA on a nominal basis by 2018. Pettis says it is an absurd prediction so he is certain it will not happen by that date. He does not want to bet. Fine. We will track this and the other predictions and see who is right. See what is absurd and what is not. 6 more years. I plan to be around.
Has any economist written up Germany’s solar power investments as non-productive investments on par with empty shopping malls?
http://www.slate.com/articles/news_and_politics/project_syndicate/2012/02/why_germany_is_phasing_out_its_solar_power_subsidies_.html
All this green ideology is plain idiocy. Meantime, natural gas price has collapsed.
Vam
What is economic justice?
Do you mean the very real hope that the standards of living for people around the world should rise. That all should have an equal share of the pie. Hopelessly naive, ưnorkable and irrespective of any natural of human laws. That we should continue to work toward advancement of the global peoples, the duty of each sane, well-balanced human on earth. A perspective that every unit of currency, or possession, that that one man has deprives another, or that I am solely responsible for my economic standing, as each other on the planet, irreconcilably insane and imbalanced. That I should be mandated by a philosophical construct, such as justice, to perform in a certain manner for the artificially created abstractions of others “truths” and “betters”, where so much in thought, and in the mind is genuinely lessor than truth, and but iẻnconciable beliefs, but, please, no. The truth is man, each (hu)man, has to be free in the understanding of his freedom to choose coupled to well grounded education, diverse ethical education, as to rights, responsibilities, privileges, and the varỉed form of ethics. Then the foundations of society can be built, where men chốe to do the better for themselves and others, of their ơn free will, and volition which í the only way we can walk toward mỏe universal global development.
In the trillions of interactions that occur daily, there is no way to reach an ảtificially created belief construct such as “justice”, let alone to legislate ít notion into ẽistence in short fashion. Yes, societies and people can act justly, which í little mỏe than describing the nature of an action. To complete justice, is rather more difficult and would lend toward a rationalization, as a predecessor notion that one man’s wealth is obtained at another’s loss, where in fact it may be just the other way ảound. Problem is, with the acceleration of everything on the planet, people might not be able to properly sỏt the relations and interrelations, impacts, in a coherent evaluation of the actors at, actions in, play.
Michael, it is of course silly to draw a straight line from the past to the future, and I agree with you this kind of predictions are always absurd. So are the kind of predictions on China’s imminent collapse (there is no shortage of that kind of predictions either). In finance, I am a believer of mean reversion and to me the China story is just a mega mean reversion process happening in front of the eyes of our generation. China has in most part of human history been one of the most advanced economies and civilizations in the world, but suffered tremendously in the past 200 years. what’s happening now is simply China is crawling back. there are of course a lot of moving parts and potential hiccups and difficult challenges, but the trend has history on its side.
Deep down, I think you are a believer of this trend, and that’s why you chose to work and live in China, and your teaching at Peking University greatly facilitates this trend. From this perspective, there is no fundamental difference between you and Jacques. His main idea is to remind people in the west of this trend that you have long been participating.
I am a regular reader of your blog and I understand your concerns about China are much more nuanced than black and white. But the negativism sometimes reflected in your pieces, and sometimes amplified by the comments here, makes you look like a “naysayer”. The prediction is silly, but the bet does not make much sense either.
JohnWax: Brian Wang may come off a bit overeager here, but his website is really interesting (I am a scientist). Most of the articles aggregated and commented relate to technology. There is a fair number of articles on both technological developments in China (Broad group modular building … etc.) and articles on economic development. Brian is obviously a big fan of China. He gets a fair number of supporting and critical comments from his readers because of this. Anyway, you are dismissing him unfairly I think. The readership on that site is often at a high level in terms of science and technology. I think Michael should go ahead and take him up on it. Several times I’ve written on the site that people should check out this site. Maybe Brian was listening. Anyway, I think the ‘bet’ is mostly just good fun.
On misallocated investment.
http://nextbigfuture.com/2012/03/comparing-china-versus-united-states-on.html
economic misallocation -
1) Whether the total economic costs of investment are less than the total economic benefits, and
2) Whether there is a mismatch in the timing of costs and benefits.
The first point determines whether the investment is ever wealth enhancing, and the second determines whether or not in the medium term there is a worsening of the underlying imbalance.
China’s construction industry makes up 18% of its economy in 2010 versus a world average of 12%. China is still developing and urbanizing so having a somewhat larger construction industry is not out of line.
Total Factor Productivity is increasing at a fast rate in China. 4% per year.
TFP in the Soviet Union actually fell by an annual average of 1% over 30 years to 1988. In contrast China’s productivity has been lifted by a massive expansion of private enterprise, and a shift of labor out of agricultural work and into more productive jobs in industry. China’s average return on physical capital is now well above the global average, according to Goldman Sachs. A decade ago it was less than half the world average.
It is well known that the US spends more on health care per person and more on education per person with average results that are often not superior to those of other developed countries.
Are the US investment in defense going to provide greater economic benefits ? It would in scenario where the defense was needed to fend off an invader or if the military gains provide more geopolitical economic returns.
China has corruption and the US has lawyers (legal industry about $250 billion) and more bureaucracy and incompetence on large construction projects.
What should or should not be in GDP means coming up with a different metric which would be irrelevant to a discussion of the current GDP metric. However, as I have stated above I do not see why China’s would be a 20-40% overstatement versus what the US GDP number is. The US has misallocation and non-performing loans and perhaps less environmental damage. However, when the US allocating resources to fix or mitigate the environmental damage this is also included in the US GDP.
An additional comment about Brian Wang: One of the readers of the blog wrote ‘who the **** is Michael Pettis’ and this was Brian’s answer:
Michael Pettis is a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets. He has taught, from 2002 to 2004, at Tsinghua University’s School of Economics and Management and, from 1992 to 2001, at Columbia University’s Graduate School of Business. He is also Chief Strategist at Shenyin Wanguo Securities (HK).
Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987, when he joined the Sovereign Debt trading team at Manufacturers Hanover (now JP Morgan). Most recently, from 1996 to 2001, Pettis worked at Bear Stearns, where he was Managing Director-Principal heading the Latin American Capital Markets and the Liability Management groups. He has also worked as a partner in a merchant banking boutique that specialized in securitizing Latin American assets and at Credit Suisse First Boston, where he headed the emerging markets trading team. Besides trading and capital markets, Pettis has been involved in sovereign advisory work, including for the Mexican government on the privatization of its banking system, the Republic of Macedonia on the restructuring of its international bank debt, and the South Korean Ministry of Finance on the restructuring of the country’s commercial bank debt.
So, I don’t think he is disrespecting him.
If you are interested in new/speculative areas of technology the volume and quality of articles on Brian’s site is pretty impressive.
Brian Wang,
If you had predicted China would become 2nd largest economy around 2010 back in 2007, how did your optimism stand throughout the evolvement of the whole 2008/early 2009 crisis year? I think your detail thinkings through that difficult period is more valuable information than the results.
Hey Brian, could you provide that link to your blog again? And also clarify exactly how awesome you are, I’m not sure I fully understood. Thanks.
I believed that China with its surpluses and extra hard currency could afford to stimulate without going too much into debt. Just like they still have the capacity left to do now. I think even with the local government debt now China still only has about 40-50% of GDP in debt. They officially ended 2011 with 47.2 trillion yuan of GDP and US$300 billion (Hong Kong and Macau).The US had to borrow to stimulate.
While the US has gone to over 100% of GDP debt. And China still has $3.3 trillion in reserves. I think China is still growing fast and has more future to mortgage. I i realize that the growth is actually a lot more uneven than the official numbers but the growth is real. The fluctuations in electricity consumption are a more real tracking. China did pass the US to have the most electricity consumption in the world and is now about 10-15% ahead of US electricity consumption. If China keeps on track say for 3 years. Then they are 20-25% bigger in GDP. Plus they have 4% per year inflation. At the end of 2015, they have 63 trillion yuan GDP and US$350 billion from Hong Kong and Macau).
If they have 20 trillion yuan in debt now, they can add 16 trillion yuan in debt and still be less than 60% of the 2015 GDP.
China will use more of the $3.3 trillion (and still increasing) more the Singapore Temasek fund. They buy strategic industries and influence. They avoid the mistakes that Japan made and do not overpay for trophy properties.
They keep urbanizing and getting the low per capita GDP rural people upgraded to productive urban citizens making3-4 times as much. Each 1% of population fully urbanized and productive adds 2-3% to GDP. 10% more population urbanized adds 20-30% to GDP. China needs to phase out the Hukou system as they have started to do and get rd of the one child policy. I do not see how they give up the 2-3% extra GDP from 1% of population successfully urbanizing for twenty to thirty years. Maybe that stalls out for 1-2 years. But then regular 3% growth plus 2% urbanization edge. Means a long term 5% GDP growth for 20-30 years until China is 85-96% urban.
I think there are advantages to governing and managing a fast growing and rising economy. China is a collection of cities and rural provinces. Shanghai, Beijing, Tianjin are all already past or passing the middle income trap level. After three years all the second tier cities are past and in 6 years all of the third tier cities. China has used its large demand to get all the technology for its domestic car industry, wide bode planes, nuclear reactors, coal reactors, high speed trains, robotics (Foxconn making 1 million industrial robots), electronics, computers, shipping. Broad Group is leading the world with factory mass produced skyscrapers which are 30% below the cost of other Chinese building developers. I think they can get their goal of 30% of world commercial construction by 2020.
In the 2008, 2009 downturn, China scooped up thousands of the young financial people who became unemployed in New York.
China is obtaining/has obtained the commodity base and infrastructure to support a world #1 economy.
Get to 2020 in decent shape and the Foxconn/irobot industrial robot revolution has gotten to a scale that changes the game. In terms of taking out the aging demographics concern about lowering productivity of an aging workforce. We should start seeing some interesting stuff by end of this year next year. Roomba vacuum type base, long neck and placing tablets or smartphones as the head with computer power, camera and display.
In terms of overbuilding. If you have a rapidly growing child, then you overpurchase and get things that are too big and they will rapidly grow into it. It is not as healthy to plan for excessive growth in an adult or mature economy because an adult usually grows by packing on fat.
South Korea had a stall for about 3 years when it was already $15,000 per year in per capita income. If China has a stall for 3 or even 4 years at $15,000 per year in per capita income then that will also be ok. That would be at about the $22 trilllion total GDP level. going to South Korea GDP growth rates of 3.5-5% in the 2020s will still work out fine. So timing on and delaying the onset of slower growth matters.
It seems the bet is on…
http://www.economist.com/blogs/freeexchange/2012/03/china-will-overtake-america-within-decade-want-bet
JAyB
As a long term reader, and participator on other blogs where Michael had participated, I would say, that despite the primacy of feeling in many quarters around the world, really a great luxury to most, and where the true intent of “critical”, has been lost in the loaded term “critical”, I would say that Michael points out how the absurdity of discussions are oft counterproductive toward movements toward more ends, while discussing the misguided “means”, I, in my contributions, add issues related to time frame, notions on cognition, and real development, including a global development model that can actually work towards growing mass expectations in a rapidly accelerating world where nouns and verbs and far more important than adjectives and adverbs. Adjectives and adverbs can be even more confusing than the unfortunate degradation of essential nouns like to “critique” which has become “critical” in the oh-woe-is-me after-school specials of our unrequited expectations.
Whoops, “critique” is a verb, this does get confusing.
Oh, wait, whoops, again, it is also a noun. Oh, god, I am confused now.
Interesting!
I think the sustainable growth on China’s economy based on a good method of changing in structure. However, I didn’t see any track on policy about it in micraeconomics.
Intuitively, I bet you win! But could you please provide more details, or data on how you see the growth in China?
BRIAN,
Have you considered income and wealth disparities within China and their relation to real market development?
http://www.instituteofideas.com/documents/Income%20Disparity%20in%20China.pdf
I would point out as well that over-investment is far from impossible, that ‘profits’ have become increasingly dependent on bank loans, that the majority of exports derive from [non-Chinese] transnational firms [China's export dependence is also a dependence on these not-national organizations and greater FDI.
'In sum, while state planners and enterprises continue to play an important role in China’s economy, state power has been used to shape an accumulation process that is now dominated by private (profit-seeking) firms, led by foreign transnational corporations, whose production is largely aimed at markets in other (mostly advanced capitalist) countries.'
[Hart-Landsburg, 2009]
Further, if I were you I would want to take a closer look at changes in the 150 million or so ‘floating population’ of semi-peasants as well as the urban working class per se – the number of ‘mass incidents’ [such as Wukan] has been on the rise.
makes a lot of sense
How about betting that the current world monetary system won’t exist in 10 years?
Jeopardy : Profits depending on bank loans and or below market debt. Chinese version: What is an SOE? US version: what is large corporation?