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Japan Economy To Drop To Third Place Behind China

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cant be long till they go number one

Japan has lost its spot as the world's second-biggest economy to China, figures out later are expected to show.

Fourth-quarter and full-year gross domestic product figures will be released by Japan at 0850 in Tokyo on Monday (2350 GMT Sunday).

Japan's economy has been hit by a drop in exports and consumer demand, while China has enjoyed a manufacturing boom.

At its current rate of growth, analysts see China overtaking the US as the world's top economy in about a decade.

"It's realistic to say that within 10 years China will be roughly the same size as the US economy," said Tom Miller of GK Dragonomics, a Beijing-based economic consultancy.

Racing ahead

There has been a debate over when exactly Japan was overtaken as the world's second biggest economy, with some analysts saying it happened in the third quarter of last year.

However, the full-year figures should give a more concrete comparison.

According to the International Monetary Fund, Japan's gross domestic product (GDP) was $5.39 trillion (£3.3 trillion) in 2010. China's preliminary figure shows its GDP last year was $5.75 trillion.

Japan's economy is expected to have grown by about 2.8% in 2010, according to the IMF. China's growth is expected to have hit a much more powerful 10% when the revised figures are released.

'Quite stunning'

The majority of China's growth has been funded by investment in manufacturing and the expansion of China's domestic industries and infrastructure.

Driving this has been a surge in exports after China became a production hub for multinational brands that wanted to benefit from low labour costs, and expanding road and rail links.

"There was an emphasis on infrastructure," said Duncan Innes-Ker of the Economist Intelligence Unit (EIU) in Beijing.

"They were building way ahead of where people thought the demand would be. And because the infrastructure was there, companies went there."

As China's economy grew, it created new jobs that saw people leave rural areas and farming, and pursue higher-paying work in the urban centres.

"The key thing was the enormous shift from people working in fields to moving into cities," said Mr Miller of consultancy GK Dragonomics.

"The urbanisation is a key structural change over the last 30 years."

At the same time, investment into China from abroad picked up, helping push the value of stocks and property to new highs.

"The level of investment in China is quite stunning," said the EIU's Mr Innes-Ker.

"In 2009, we saw almost 25% growth, year-on-year, in real terms of investment. That is unprecedented for a large economy."

'Lost decade'

By contrast, Japan has been struggling to come to terms with what many analysts call a "lost decade".

In the 1980s Japanese products such as electronics and vehicles were in demand globally, and at its peak the economy was growing at more than 7% annually.

But this in turn was fuelling a spending and borrowing spree, and by the 1990s bubbles had developed in the stock and property markets.

"Land value was unrealistic and the government tried to build its way out, debt ratcheted up and the productivity of the economy really suffered," said the EIU's Mr Innes-Ker.

Today, there are signs that Japan has manage to turn its economy around, but it is still dealing with the impact of an ageing population and low consumer demand.

Even so, most economists agree that while China as a whole is growing, and the average person is getting wealthier, comparing only the size of its economy to Japan's does not paint an accurate enough picture.

"GDP per head in China is about $4,500, but in Japan it's about $40,000 per head," said Mr Miller.

"Most people in China are still poor, more people live in the countryside than in cities. The average Japanese person is much much richer than the average Chinese person," he said.

Tougher times?

And while China may be moving up the economic power table, it is not immune from problems.

Its rapid rate of expansion is accelerating inflation, and analysts are warning of a possible bubble brewing in the property market.

The government, meanwhile, is facing growing international criticism of its currency policy and is accused of keeping the yuan undervalued.

Faced with these problems, economists expect China's economic growth to slow markedly.

"China ought to keep on growing for a good few years but growth will come down a little bit to 7-8%," said Mr Miller from GK Dragonomics.

"The bigger you are, the harder it is to keep growing really really fast."

But even at a slower pace, China should keep marching towards the spot of the world's biggest economy.

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cant be long till they go number one

Japan has lost its spot as the world's second-biggest economy to China, figures out later are expected to show.

Fourth-quarter and full-year gross domestic product figures will be released by Japan at 0850 in Tokyo on Monday (2350 GMT Sunday).

Japan's economy has been hit by a drop in exports and consumer demand, while China has enjoyed a manufacturing boom.

At its current rate of growth, analysts see China overtaking the US as the world's top economy in about a decade.

"It's realistic to say that within 10 years China will be roughly the same size as the US economy," said Tom Miller of GK Dragonomics, a Beijing-based economic consultancy.

Racing ahead

In my view China is already number one.

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cant be long till they go number one

Japan has lost its spot as the world's second-biggest economy to China, (...)

Total GDP, yes, but China's population is around 10 times bigger than Japan's.

So, Japan's GDP / person is still around 10 times higher.

China is still a very poor country.

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Total GDP, yes, but China's population is around 10 times bigger than Japan's.

So, Japan's GDP / person is still around 10 times higher.

China is still a very poor country.

Ah but a few are stinking rich and therien lies the usual Chinese problem. The "Mandate of Heaven" will kick in and it will all collapse and somone will have to start it again.

http://en.wikipedia.org/wiki/Mandate_of_Heaven#Transition_between_the_Shang_and_the_Zhou

The Mandate of Heaven (Chinese: 天命; pinyin: Wang King Tiānmìng) is a traditional Chinese philosophical concept concerning the legitimacy of rulers. It is similar to the European concept of the divine right of kings, in that both sought to legitimize rule from divine approval; however, unlike the divine right of kings, the Mandate of Heaven is predicated on the conduct of the ruler in question. The Mandate of Heaven postulates that heaven would bless the authority of a just ruler, but would be displeased with a despotic ruler and would withdraw its mandate, leading to the overthrow of that ruler. The Mandate of Heaven would then transfer to those who would rule best. Due in part to the Mandate of Heaven, Chinese emperors were considered 'god-like', as rulers sent from heaven.

The Mandate of Heaven does not require that a legitimate ruler be of noble birth, and dynasties were often founded by people of modest birth (such as the Han dynasty and Ming dynasty). The concept of the Mandate of Heaven was first used to support the rule of the kings of the Zhou Dynasty, and their overthrow of the earlier Shang dynasty. It was used throughout the history of China to support the rule of the Emperors of China, including 'foreign' dynasties such as the Qing Dynasty.

The concept is important to the Chinese understanding of historiography, as it allows only one legitimate ruler at any one time. Because of this, Chinese historians writing about periods in which China was not unified under a single ruler (most notably during the period before 221 BC, the Three Kingdoms period, and the Five Dynasties period) tended to designate one of the rulers of the period as legitimate, and consider the others as illegitimate contenders.

The Mandate of Heaven was a well-accepted and popular idea among the people of China, as it argues for the removal of incompetent or despotic rulers, and provided an incentive for rulers to rule well and justly. The concept was often invoked by philosophers and scholars in ancient China as a way to curtail the abuse of power by the ruler, in a system that otherwise offered no other check to this power. The Mandate of Heaven had no time limitations, instead depending on the just and able performance of the ruler. In the past, times of poverty and natural disasters were taken as signs that heaven considered the incumbent ruler unjust and thus in need of replacement.

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But this in turn was fuelling a spending and borrowing spree, and by the 1990s bubbles had developed in the stock and property markets.

"Land value was unrealistic and the government tried to build its way out, debt ratcheted up and the productivity of the economy really suffered," said the EIU's Mr Innes-Ker.

Sounds familiar.

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In my view China is already number one.

Definitely, countries like America and Britain are just moving money around like in stock markets, earning money from 'knowledge economies' which have very little barriers to entry for countries like China, and ofcourse the big financial parasitical system is somehow fudging the numbers to make our economies look much bigger than they really are, via debt.

In my opinion China has been number one since 2007, and I'd say Japan number two- in terms of real wealth creation. Big Western corporations are moving all their manufacturing to China then hiding behind marketing and it's only a matter of time until rich Chinese companies come into the West and compete directly for a bigger slice of the profits. As knowledge and manufacturing processes become easier to obtain, the big money will gradually concentrate into marketing. When the debt based financial system collapses it will be the people in marketing, making business happen, which come out top.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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