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Competitiveness: A spate of new reports show China leapfrogging other nations on its way to economic superpower status. Time to concede the global economic lead to the world's most populous nation? Hardly.
The news these days is filled with Chinese triumphalism. The indispensable Drudge Report did us all a favor by collecting a number of very recent headlines about China's soaring, seemingly unstoppable, economy. Among them:
• "China Ends U.S.'s Reign as Largest Auto Market" (Bloomberg).
• "China Becomes Biggest Exporter, Edging Out Germany" (Associated Press).
• "China Banks Eclipse U.S. Rivals" (Financial Times of London).
To top it off, Nobel Prize-winning economist Robert Fogel predicted early in the new year that China's economy alone would hit $123 trillion in 2040, three times what the entire world produced in 2000 and more than twice the world's current output. Per-capita income will be $85,000, more than triple that in the European Union.
Such news is sure to spark a new round of hand-wringing in the U.S. It's only in a matter of time, they will tell us, that China will be top dog — and the U.S. just an economic pup by comparison.
With reported average GDP growth of 10% (even last year, during a global financial crisis, China reportedly grew at an 8% pace and is predicted to grow 9.5% this year), that's a real possibility. Ten percent growth leads to a doubling of the economy in just seven years. At 2.5%, where the U.S. is now, it takes about 29 years.
So China's total GDP of $5 trillion will soon overtake our $14 trillion, right? Not so fast.
First, let's ask the question that economists often ask but is all but ignored in the media: Can China's data be trusted? Many economists believe the answer is no. In fact, no one knows for sure what China's GDP is. The communist government simply announces it — there is virtually no transparency.
These problems go way back. In 1992, China finally stopped using economic accounting methods it learned from the USSR — methods that led to consistent overestimates of Chinese growth.
Yet problems remained. In a 2001 study, economist Thomas Rawski of the University of Pittsburgh declared that "recent growth claims defy economic logic and clash with a broad array of credible information from Chinese resources ..."
Last year, Derek Scissors, a fellow at the Heritage Foundation, likewise critiqued China's economic record-keeping — and asserted China's current economic model of high growth based on forced lending by the government is unsustainable.
Latin America: For all his pious talk about sticking up for the little guy, Hugo Chavez clobbered Venezuela's poor over the weekend by devaluing their currency. When are his apologists going to learn? Over the weekend, ordinary Venezuelans lined up in panic to buy TV sets as a hedge against ...
Leadership: The top Senate Democrat has exposed the hypocrisy of modern liberalism through his racially insensitive remarks. Trent Lott lost his post for humoring an old man. How will Robert Byrd's party honor him? Republican National Committee Chairman Michael Steele has called for the ...
Skin color among African-Americans is not to be discussed in polite company, so Senate Majority Leader Harry Reid's newly disclosed remark about President Obama — that voters are more comfortable with him because he's light-skinned — offended decorum. But it was surely true. Color bias ...
Politics: Democrats seated two senators under shady conditions and rewrote a state election law to keep their filibuster-proof majority in the Senate. Now they plan to deny Scott Brown entry if he wins Ted Kennedy's seat. The fate of health care reform may very well hinge on the Jan. 19 ...
If you still require proof the Environmental Protection Agency operates without any sort of tethering to reality, you need look no further than its crackdown on smog. The agency recently proposed to ratchet down the ground-level ozone standard to 0.060 to 0.070 parts per million from the 0.075 ppm ...
Posted By: acierno(350) on 1/11/2010 | 8:58 PM ET
china has yet to learn the boom and bust cycle of the capitalists system - even with their iron hand when the $hit hits the fan watch out.
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