As I noted before, there are two ways for "China to overtake US." (US going down or China going up) Some predictions by oxford analytic (organizartion with staff of more than 1000 mainly university economists - more at www.oxan.com) on the first way: "Consumer Spending: The United States has the most consumption-dependent economy in the developed world. The household savings rate is now zero. Signs of a slowdown in housing are already apparent in some regions of the country. Combined with the continued steady rise in interest rates, this could restrain consumer spending. Inflation, which picked up noticeably this year, should remain contained. The Fed is doing its part to combat inflation by raising the federal funds rate and should continue to do so through the end of Greenspan's term in January and during the first quarter. There is still some room to raise interest rates without choking off economic growth. Although monetary policy seems to be on a sound footing, fiscal policy is in poor shape. In the fourth year of a broad-based economic expansion, it is hard to justify a federal budget deficit of 3.5% to 4.0% of GDP. However, the prospects of fiscal austerity during an election year are slim. The United States is running an enormous current account deficit. This reflects both government and consumer profligacy. However, the most likely scenario for the current account deficit, given the present political climate, is a continued increase. Uncertainties in the outlook for the economy fall mostly on the downside. Economic growth has been healthy for the past few years, but there are many imbalances. These are interrelated, which means a potential downturn in one area could have an outsized "ripple" effect: -- Housing Collapse: The recent runup in interest rates by the Fed could cause a significant slowdown in the housing market. This could have compounding negative effects on consumption if cash-out refinancing is sharply curtailed. -- Energy Prices: Energy prices remain a threat. This winter, energy bills could curtail consumer spending and raise household-debt levels more than expected. Furthermore, high energy prices could contribute to negative industry effects, especially among hard-pressed automobile manufacturers. -- Financial Crisis: It is possible that these imbalances could produce a sudden drop in confidence in the financial markets. Should the United States be unable to attract the capital it needs to fund the current account deficit, the dollar and equity markets would fall and interest rates would rise sharply." For full article etc. visit their site.
I agree with all your post, but want to extend this last paragraph's point: Currently, US gets a significant fraction of its oil from Venezuela, but after China was not allowed to buy UniCal's large in ground oil reserves (even by offering to pay more for them than others) China has started to deal with Chavez, who is not exactly a friend of the US. Quite possibly, one day soon, Americans will wake up to find that part of the US oil supply is going only to China. Like China, Venezuela has greatly increased it defense budget, bought lots of AK47 etc and has a strong popular support in the poor of the country - They now get free medical service from good Cuban doctors. When the upper class oligarchies controlled the oil profit, the poor got nothing but the oligarchie got special schools, special stores, free medical care, etc. all restricted for themselves. Now they are trying all possible means to topple the populist Chavez, who quite justifiably fears US intervention, especially if he cuts off oil sales to US as he very well may once those new AK47s etc are in the hands of his expanding army of poor and they are better trained in their use and guerrilla war fare.
US car market is stagnate at about 15 to 17 million units/ per year, probably soon declining as average real wages have been for 4 years in a row now and interest costs are on way up still, probably accelerating rate of rise as more foreigners get scared of dollar decline, so “take-cash-out-of-house-equity-to-finance expenditures-beyond-family's-income” days are over. China sold 5 million cars domestically last year and that market is in rapid expansion. In about five years, Chinese car production will exceed US. (Think of that effect on the price of gas.) Even today, Toyota is biggest producer/seller in US market and GM is rapidly headed for bankruptcy. China overtaking US is rapidly occurring, not a question of "if or will" but of "How many years till done?" - I guess 5, but mainly by US decline due to excess wars and debt, as China's 9%/year growth rate alone will not do it in 5 years, but their buying oil (and more of their soybeans from Brazil instead of US etc.) will contribute to US decline.
Obviously there is a huge rising market for cars in China. Our large gas-guzzlers have no place there. They already have an infrastructure problem to deal with the huge boom in auto ownership. What happens in China - in contrast to the West - is that friends, relatives, and family members will pool their money together to buy a car and then all climb in to share it. And this is highly understandable with the culture and the masses of people. So how do you deal with something like that? China recently tried to obtain a U.S. refinery - I forget which one. The title of the reporter's headline was: "Now this is Scary." Is it? What should they do? 95% of the streets are still filled with bicycles (depends on the city or region) and now here comes this massive input of cars taking over the streets. And you would not believe how recklessly they drive, disobeying the law - if there are any? I've never even heard of anyone getting a ticket (no speeding tickets). They get arrested when they end up causing an accident that kills a pedestrian.
Agreed. And that brings up another very important point that I don't believe anyone here has addressed yet. To advance a some-what backwards country (sorry, can't find a better descriptive word at the moment) straight into a full-blown industrial setting takes MUCH more than simply building factories and churning out products. It's also going to require a huge change in the human element. With the exception of a few of the larger cities, the rest of the entire nation is still agricultural. The change that everyone (almost everyone) here seems to expect to happen so quickly could be compared to taking the majority of the population and suddenly thrusting them into the 20th century directly from the middle of the 19th. And then they still have to advance into the 21st. There's a lot of deep-rooted culture and attitudes that will have to be changed. While you can take someone directly out of a rice paddy and put them to work boxing trinkets in a plastics factory, someone else still has to understand and operate the machinery. And just as the above example shows, taking people directly off bicycles and putting them into cars does not go easily or smoothly. It's going to take a lot of time and effort for the average citizen all across the nation to adapt.
I agree with most of the above, but do want to note that the time required to learn how to go from bicycle to car driver is less than one year, if one can assume the chinese teenager is similar to the American one. - How many years did you require to go from bike to car? Also note that most will not even be able to afford a car, by families "Pooling Resources" (new meaning for "car pool") but there will a multitude of motor bike weaving in and out between the petal bikes of the side streets. I excect the major urban road will be restricted to buses and cars soon - no petal bikes at least. Summay: yes, peasant moving to the city needs to adapt, but one who only looked at the stern end of a water buffalo for 30 years will do so faster than he can earn and save the money required to be part of a "car pool" (THE NEW MEANING). China will have plenty of buyers for even 20 million cars /year in 5 years at current growth rates and urbanizatin rates. In 5 years US will be selling around 10 million cars / year - my estimate. (The majority of which will much smaller and more efficient than today´s gas hogs.)
Light: Over 90% of the Chinese population are peasants that live in rural areas - mostly tied to agricultaral production, ceramics, weaving, and mining. Even my associates at the universities (my Chinese administrators) referred to this-and-that as being "backwards." So it's not an inappropriate word to use in the case of China. In the university setting, if you are not liked or unwanted, they told me that their associates - be they in a superior position or not - will do something counter-productive to make sure that you don't get ahead in your career or advance to a higher position even if it's destructive to the whole. Bicycles are still the main form of transportation in China. Second to that is walking. In urban areas, just like in the U.S. they are forming seperate lanes on the righthand side of the street for bicycles, not onto the sidewalks. Too many pedestrians for that. Bicycles are used to transport produce and protects and can become quite large and wide when loaded up to drive on sidewalks - in some cases, almost as wide as a small car.
this plus your earlier comment about not having heard of a chinese person getting a traffic ticket, makes me think you may be in or have some direct contact with China - I went to your bio, but nothing there. Are you in china? what is the bases for your statements? If in China, and you read Chinese, some material from the news papers etc, I would appreciate, much more than things anyone can find in Google.
....sixty nine billion, and what do you get? Another month older and deeper in debt. … (With apology to old song: "16 tons of No. 9 coal.") US's Oct. trade deficit sets record of 68.9 billion dollars.
Billy T: You're arising on these forums with a bad habit of sarcasm, slander, putting people down by thinking you know more, and just posting at whim without any sources. Why not try just asking a question about what you do not know? You've read absolutely none of the intelligent posts above, and I do not believe in immaturely trying to impress people with credentials and experience as others seem to do on these forums. BUT, I am asking you to be scientific, rational, and MATURE. We really aren't interested in your little spur-of-the-moment song analogies posted above that has absolutely nothing to do with this forum - nor is anyone interested in hearing your rhymes. I think I remember we did this in kindergarten? Locked
more information and facts in less words than yours here - It is important that US october trade deficit is new record, 68.9 billion in one month. Sorry if you don't like my analogy to the coal miner getting deeper in debt - poem is not mine, only stollen from popular song of years ago.
Billy_T: I feel I've done you a great injustice in my last posting and I must apoligize for this. Where did you get this poem from? The wording of it instantly reminded me of a similar poem often said among coal miners decades ago in the U.S. As a person gets older and acquires knowledge of all sorts, it gets harder to distinguish such shortened lines (innuendos) in relation to the context. The misunderstanding is entirely my fault, and I am very sorry. If you haven't read the above posts, I've teached English (ESL) to Chinese in the U.S., for 15 years, lived in Taiwan for 9, traveled and lived in H.K over 20 times for 3 months on end each time, visited Beijing (including during the Tiananmen massacre), Shangai, Sezhuan, Hangzhou, Guangzhou 4 times, and lived in Mainland China for 5 years. I return periodically and have many friends and associates there at universites. I will be flying back to H.K., Xiamen, and Taiwan Jan. 4-16 and may move back again in June. I am not a Sino-intellectual, but think that I can relay and translate my experiences in China to Westerner's better than most, due to my extensive experience. I was very outgoing and exploring - always getting to the point of the matter. However, as China evolves more-and-more into a modern country - in parts - there are many others that know more than I. In fact, the last Lonely Planet China book had to be written by about six seperate authors in order to cover it all now. I take a bus from H.K. to Xiamen in Fujian Province, and each time I do so it is utterly unbelievable to see the new skyscraper apartments and parallel roads and highways that were non-existant the year before. No doubt: the entire country is on the move. But I am also aware of the extensive corruption and payoffs, especially amongst the local village and county cadres. Many people think China has a "one-child/couple" law, and look upon this as such a great initiative. Yet, it is amongst the worst jokes in china. In fact, except for couples who have been just married, I've seldom ever met a couple with only one child: the norm is 3-5.
To Valich: Thanks for the information. Please give us more of your views on China. (I do always read your Google et al posts and find often them interesting, but I encourage you to supply more of what I can not get, incites about China etc - thing that at least you think are true etc.) There was a popular singer, Tennessee Ernie Ford (Why I should remember his name is beyond me - I am not much into popular music.) Perhaps his biggest hit (surely in the top ten for months, if not No. 1 for weeks) was where I stole the "poem." All I can remember of it was: "The big boss said: "Well bless my soul!" "You loaded 16 tons of Number 9 coal." Then came the refrain: "And what do you get? - Another day older and deeper in debt." It ended with: "St. Peter don't you call me, ‘cause I can't come. - I owe my soul to the company store." I am sure there was a line just before this ending that rhymed with "come" or "store", but I do not recall it. It spoke of the hopeless situation that many found themselves in. I thought it applicable to the US now as the twin deficits grow, and the tax paying baby boomers retire and begin to collect Social Security instead of pay taxes, and dollar-rich China bids increasing more to meet its rapidly growing oil needs. I think the only thing that the US can do in a few years to pay this debt is to print money. IMHO the US already "owes it soul" to foreigners and is now trapped by years of living beyond its means. I have been moving all my assets that I could out of dollars for several years, mainly in to ADRs and most have more than doubled, two have tripled. I often see thing coming before others, sometime so far in advance that I act too soon. The dollar is still strong. I did not foresee the false* Global liquidity that has caused this, but fortunately for my ADRs, others are now also "running for cover." Some to Gold,* which has also doubled, etc. but I do not like "dead assets." I hold no ADRs of China - it is too popular for me and I do worry about possible radical changes, but I have been looking at www.axmpharma.com. They have new factory in Shenyang, and are in a business area I like. Know anything about them? or the field? Parts of their web site are in chinese. What is you impression of them? Be warned, there is good chance they may go under. - They defaulted on some debt a few days ago. etc. Please take a look at -www.axmpharma.com/whisper_photos/pages/Shenzhen_News_jpg.htm for me. Read the chinese, at least under the photo of factory and confirm for me it is their new factory. Thanks. Lets keep in touch when you are in China again. If you will not be here, via Emails. _____________________________ * Dollars are being pumped out as central banks buy gold to also "run for cover" although they state that they are only "diversifying" their reserves. It will soon be a race to see who gets stuck holding dollars. (Japan will be one of the big lossers as it needs US military protection and will be slow to act.)
Yesterday China officially past Italy to be come No 6 in the list of global economies during 2004. It is already certain that when 2005 results are in, China will be No. 4, behind only US, Japan, and Germany. Approximately in 2007 or 2008, China will be No. 3, trailing only US and Japan. Before 2040 China will be No. 1 Please Register or Log in to view the hidden image! NY stock market today (21Dec.05): General Motors stock, GM, closed at a 23 year low. GM will be in Chapter 11 in about two years. Big money investors can see the handwriting on the wall, even if most readers here can not. Please Register or Log in to view the hidden image! (Not all here are old enough to remember when GM was the "bell weather" of the US economy.) "As GM goes, so goes the nation." etc. That "bell" is now tolling the coming collapse of the dollar and the economy, loud and clear. It is not a question of "Will China pass US?" but only "How many years until?" Think what that means for the price of oil, whose production is now at peak and never will be greater. :bugeye: Note: For one day this post had "England" where "Japan" should be. I have now read report in newspaper. (I misunderstood TV report yesterday, which was in Portugese. Information above is now correct.)
