China now has No. 2 economy in world

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Registered: 03-23-2003
China now has No. 2 economy in world
Mon, 08-16-2010 - 11:25am

Monday, August 16, 2010 - Page updated at 06:55 AM

Complete article at:

China now has No. 2 economy in world


The New York Times

SHANGHAI, China  After three decades of spectacular growth, China has passed Japan to become the world's second-largest economy behind the United States, according to government figures released early Monday.

The milestone, though anticipated for some time, is the most striking evidence yet that China's ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.

The milestone was reached when Japan announced its second-quarter gross domestic product (GDP) was valued at about $1.28 trillion, substantially less than forecast and slightly less than China's $1.33 trillion. The United States' full-year GDP was roughly $14 trillion in 2009.

GDP is the total value of all domestically produced goods and services.

Experts say unseating Japan, and in recent years passing Germany, France and Great Britain, underscores China's growing clout and bolsters forecasts that China will pass the United States as the world's biggest economy as early as 2030.

"This has enormous significance," said Nicholas Lardy, an economist at the Peterson Institute for International Economics in Washington, D.C. "It reconfirms what's been happening for the better part of a decade: China has been eclipsing Japan economically. For everyone in China's region, they're now the biggest trading partner rather than the U.S. or Japan."

For Japan, whose economy has been stagnating for more than a decade, the figures reflect a decline in economic and political power. Japan has had the world's second-largest economy for much of the past four decades, according to the World Bank. And there was even talk during the 1980s about Japan's economy some day overtaking that of the U.S.

This country has roughly the same land mass as the United States, but it is burdened with one-fifth of the world's population and insufficient resources. China's per-capita income is more on a par with those of impoverished nations such as Algeria, El Salvador and Albania, close to $3,600, than that of the United States, where it is about $46,000.

Yet, there is little disputing that under the direction of the Communist Party, China has begun to reshape the way the global economy functions by virtue of its growing dominance of trade, its huge hoard of foreign-exchange reserves and U.S. government debt and its voracious appetite for oil, coal, iron ore and other natural resources.

China already is a major driver of global growth. The country's leaders have grown more confident on the international stage and have begun to assert greater influence in Asia, Africa and Latin America, with such things as special trade agreements and multibillion-dollar resource deals.

"They're exerting a lot of influence on the global economy and becoming dominant in Asia," said Eswar Prasad, a professor of trade policy at Cornell and former head of the International Monetary Fund's China division. "A lot of other economies in the region are essentially riding on China's coat tails, and this is remarkable for an economy with a low per-capita income."

The Chinese government also is beginning to shape global dialogues on a range of issues, analysts said, such as last year, when it asserted the dollar must be phased out as the world's primary reserve currency.

And while the United States and the European Union are struggling to grow in the wake of the worst economic crisis in decades, China has continued to climb up the economic league by investing heavily in infrastructure and backing a $586 billion stimulus plan.

Regardless, a fast-growing China suggests it will continue to compete fiercely with the United States and Europe for natural resources but also offer big opportunities for global companies and technology firms eager to tap its market.

China passed the United States last year to become the world's largest market for passenger vehicles. China also passed Germany last year to become the world's biggest exporter.

Global companies such as Caterpillar, General Electric, General Motors and Siemens, as well as scores of others, are making a more aggressive push into China, in some cases moving research and development centers here.

However, some analysts say that, while China is eager to assert itself as a financial and economic power, and to push its state companies to "go global", it is reluctant to play a greater role in the debate over climate change or how to slow the growth of greenhouse gases.

China passed the United States in 2006 to become the world's largest emitter of greenhouse gases, which scientists link to global warming. But it also has an ambitious program to cut the energy it uses for each unit of economic output by 20 percent by the end of 2010, compared with 2006.

China has imposed stringent automotive fuel-economy standards, built a new generation of more efficient coal-fired power plants and begun a national program to close antiquated factories or refit them with more efficient equipment.

Assessing what China's newfound clout means, though, is complicated. While the country is still relatively poor per capita, it has an authoritarian government that is capable of taking decisive action to stimulate the economy, build new projects and invest in specific industries.

That, said the Peterson Institute's Lardy at the Peterson Institute, gives the country unusual power.

"China is already the primary determiner of the price of virtually every major commodity," he said. "And the Chinese government can be much more decisive in allocating resources in a way that other governments of this level of per-capita income cannot."

New York Times reporter Hiroko Tabuchi contributed to this report.

Copyright © The Seattle Times Company

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iVillage Member
Registered: 03-18-2000
Tue, 08-17-2010 - 9:15am
I'm not the least bit surprised given that the West has moved so much of their manufacturing there.



Avatar for kathaksung
iVillage Member
Registered: 04-11-2003
Tue, 09-21-2010 - 8:18pm

I talked about it one year ago. see #7 in following article. China's economy gets big leap forward after it awarded membership of WTO. All tax barrier were eliminated.

610. The road of persecution (9/23/09)

1. I was a seller in flea market. In 1991, I learned from newspaper that one importer from whom I had bought merchandise was arrested for drug smuggling. I found I was under surveillance too.

2. Several months later, my leg was hurt and couldn't move. I found it was caused by the radiation of isotope money. Feds uses it to tracking place where people keep cash. My health was seriously hurt. I complained to the Federal attorney. Since then I became a murder target of the Feds. The murder method included E.M. wave shooting.

3. In 1994, I went to China, wish to get rid of the persecution from the Feds. I found in China I still was under surveillance. The payment for China's co-operation was to improve China's trading with US. In that year, China got the most favored nation treatment from the US. My China trip may motivated the OKC bombing.

4. In 1995, FBI created Oklahoma bombing in order to get more police power. With OKC bombing FBI director Louis Freeh proposed an Act which is similar to the Patriot Act but failed.
The evidence that FBI involved in OKC bombing can be found in court document:

5. In March 1999, as the persecution intensified, I had to leave US again. Because China has been bought by the Feds, I went to South-east Asia. In March, 2000, there was an attempt to frame me in a drug case, I had tried to seek asylum in the Foreign Minister of Thailand.

6. In 2000, when I returned to US, the bitter experience motivated me to expose the ugly face of the Feds in the Internet. I wrote a journal style article "The dark side of US" with every five days a story. It now accumulates to 610 messages. It really touched the nerve of the Feds. I think it was one of the reasons they activated 911.

7. In early April, 2001, Feds (DOD and DOJ) created EP-3 spy plane incident. In negotiation to release the spy plane crew, FBI and DEA signed a secret deal with Chinese government. In the secret deal, China would frame a drug case. The payment was huge. China was granted to host 2008 Olympic Game and to be a member of WTO. China was greatly benefitted by this deal. As a result, China now becomes the second economic power in the world. Because of that deal, both the director of FBI and DEA resigned in April and left their posts three months later.

to see the secret deal about spy-plane at:

8. My brother in law is a business man who imported goods from China. I alleged the Chinese secret police planted drugs in merchandise he imported. The first plot was planed on June 11, 2001. Feds set McVeigh's execution date on that day to distract public's attention. I revealed the secret deal in the Internet.

9. After the 6/11 plot went soured, Feds prepared 911 attack. Silverstein negotiated to lease the World Trade Center in New York and signed the contract in July. The 911 attack did what OKC bombing hadn't achieved - Feds got the power they wanted, that is the Patriot Act.

10. On May 3, 2002, my brother in law had a birthday party. I thought the Feds had set up a trap and didn't attend it. I revealed it in the Internet. Several days later, my tenant (who rented a bedroom in my house) and a neighbor, suddenly left. Both the two came from China. Later I learned from the news that FISA court rebuked A.G. Ashcroft for deceiving the judge. Thus I knew I was under the surveillance of FISA warranty. The two were Chinese secret police, placed in my house and neighbor by the Feds. They had to leave after the FISA court withdrew the warranty.

11. I alleged the tenant (Chinese secret police) planted drugs in my house. Because in following years, several times Feds tried to perform searches by disguising as roofing contractor or garage door contractor. (to reach their goal, the roof file and garage door were damaged.)

12. Since then many framed cases were plotted. The latest case is trying to perform search in the name of IRS. To reach their goal, my wife deliberately filed wrong tax return. I had to abandon the joint tax return. One event they created was the Virginia Tech. massacre which was used to distract the framed case. It took place on April. 17, 2007 - the last day to file the tax return. When the Feds expected me to file the tax return.