9 ms·

China Passes Japan as Second-Largest Economy

88 points by danhak 16y ago

known 16y ago
And the weird thing is China ranks 89 and Pakistan 85 in http://www.doingbusiness.org/economyrankings/ http://www.doingbusiness.org/economyrankings/
IdeaHamster 16y ago
Read to the second page, especially this: Global companies like 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. I am, personally, familiar with the movement of R&D to China. This, alone, makes me believe that this is not a flash-in-the-pan, but a genuine long term trend. Also, as I recall the original estimate for when China would become #1 auto consumer was 2012. They beat that by 3 years. So, I would hazard a guess that it won't take them all the way to 2030 to become economy #1. What will be really interesting about that, though, is that due to population size alone, they will still have a far, far smaller per-capita income than the U.S.
- mkr-hn 16y ago
  Over a billion people with increasing incomes and opportunity is going to create a lot of amazing things if they can manage the growth properly.
- nostromo 16y ago
  It's hard for me to envision it being too much earlier than that -- take a look at this chart: http://www.google.com/publicdata?ds=wb-wdi&ctype=l&strail=false&nselm=h&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:CHN:USA&tstart=-315619200000&tunit=Y&tlen=48&hl=en&dl=en http://www.google.com/publicdata?ds=wb-wdi&ctype=l&s... -- it's not like the US isn't a moving target. Especially if the US and EU get serious about alleged currency manipulation -- it's funny to see a graph of US to Yuan stay virtually flat for many years dispite their economic growth: http://www.google.com/finance/chart?q=CURRENCY:CNYUSD&tkr=1&p=5Y http://www.google.com/finance/chart?q=CURRENCY:CNYUSD&tk... -- compare that to organic exchange rates: http://www.google.com/finance/chart?q=CURRENCY:CNYEUR&tkr=1&p=5Y http://www.google.com/finance/chart?q=CURRENCY:CNYEUR&tk... and http://www.google.com/finance/chart?q=CURRENCY:GBPUSD&tkr=1&p=5Y http://www.google.com/finance/chart?q=CURRENCY:GBPUSD&tk... Btw, it seems China is the world's largest auto market by units sold, not by dollars/yuan sold -- which is an odd way to think about it. Cars are significantly cheaper in China.
  - eru 16y ago
    "GDP in current U.S. dollars. Not adjusted for inflation." It would be nice to see the inflation adjusted figures.
- niekmaas 16y ago
  It's also interesting to note that China's economy is not just about low-tech anymore but gradually become more and more higher-tech. Where Chinese cities welcomed all the cheap toy factories a couple of yours ago, I remember reading a Washington Post China article about the fact that certain areas in China ban these kind of factories now. These areas only want higher (not high) tech factories to reach out to different employees and investors. The low tech (toy) companies now move to Vietnam/Laos etc.
- c1sc0 16y ago
  Remember that article a while ago that China was setting up more sequencing capacity in a single building than the whole US combined? For now they're still buying US-made Illumina machines, but I'd expect them to come up with their own technology soon.
amichail 16y ago
Is there any danger to English as a universal language for the internet, business, education, and research? Will we need to learn Chinese in a decade or two?
- patio11 16y ago
  There are much more compelling reasons for Chinese people to learn English than there are for foreigners to learn Chinese, though it certainly won't hurt your job prospects. For one, if you learn to speak Chinese you get improved job prospects vis-a-vis two countries. (Yeah, I went there, PRC.) A Chinese person who learns English gets instant access to the US, Anglosphere, Japan (well, cough, theoretically speaking), Western Europe, etc etc. (Same for Japanese, too. I get "You should have studied Chinese!" all the time, as if these islands had sunken into the ocean after the bubble burst and do not still outrank every European country in trade with the US.)
  - pvg 16y ago
    Not that I think we'll be all be buckling down to master Mandarin in our lifetimes but the lingua franca does sometimes change as the expression itself suggests. as if these islands had sunken into the ocean after the bubble burst and do not still outrank every European country in trade with the US By that measure, we should all study Canadian and Mexican as well! http://www.census.gov/foreign-trade/top/dst/current/balance.html http://www.census.gov/foreign-trade/top/dst/current/balance....
    - byw 16y ago
      Isn't Spanish the most learned foreign language by far in the States? http://www.vistawide.com/languages/us_languages.htm http://www.vistawide.com/languages/us_languages.htm
      - patio11 16y ago
        Yes. Not a wonderful choice for career opportunities unless you enjoy competing with millions of native bilinguals, by the way.
younata 16y ago
I love how it's talking about china being #2, with a $1.33 trillion gdp, then it drops US's $14 trillion gdp, as if it's an easy to achieve milestone. I have no fears that china will outpace the US, for a number of reasons.
- ryanlchan 16y ago
  Perhaps not, but it certainly says something about the fragility of the US monopole mentality. Even if they get to just half of the US GDP, it would be a major coup for China.
  - ovi256 16y ago
    >Even if they get to just half of the US GDP They almost did, $1.33 trillions is quarterly GDP, they need 20% more. They'll get that in a few years. Resource exhaustion will become a soft limit pretty fast. I don't believe in Malthusian hard limits, but extraction and distribution systems may grow more slowly than demand even without hard resource limits.
- borisk 16y ago
  $1.33 trillion is China quarter GDP, $14 trillion is US yearly GDP. And the second includes many trillions of financial "product". http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:CHN&dl=en&hl=en&q=china+gdp#met=ny_gdp_mktp_cd&idim=country:CHN:JPN:USA http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mk...
  - sqrt17 16y ago
    The EU has $16 trillion yearly GDP. Wouldn't that make China #3? (The Eurozone alone has ~$10 trillion yearly). Don't come with the argument of, "oh they have all different governments and all different languages". State governments in the US hold a great fraction of legislative power (to the point where you're not a US lawyer, but a WA, TX or CL lawyer), and provinces in China have local languages (yes, languages - there's a point to using an ideographic writing system because you can use it for languages other than Mandarin) and not everyone speaks Mandarin.
keyle 16y ago
Well, well, this reminded me why they speak Chinese in Firefly.
- WildUtah 16y ago
  But it doesn't explain why there are no actual Chinese people on Firefly. This does explain it: http://www.youtube.com/watch?v=MNmzegQUtFA http://www.youtube.com/watch?v=MNmzegQUtFA
  - vorg 16y ago
    But bet it doesn't explain why you can't access that website and video from within China's borders!!!
nopassrecover 16y ago
I find it pretty amazing that Japan was second for so long given the country's relatively small size and its 19th and 20th century history.
- fgf 16y ago
  I don't.. It's population is as big as russias and bigger than any other nation with a comparable average national IQ (besides the US) and some kind of capitalism. I can't think of a single example of this combination not leading to convergence with the highest gdp capita countries.
  - nopassrecover 16y ago
    I guess this is the key. Still the nation went from a level of pre-industrialization and through the devastation of the second world war to be the second largest economy in te world. If I understand correctly the economy has been relatively stagnant for sometime too and has still held its position.
    - eru 16y ago
      The numbers for Germany aren't too dissimilar.
artpop 16y ago
This and discovering water on Mars are my two all time déjà vu news articles.
known 16y ago
I think management team and shareholders should also go and live in China if they're sending jobs there.
uuoc 16y ago
Please do not post links to the NYTimes paywall.
wslh 16y ago
It's interesting to follow China ranking not just in the GDP but in PPP (GDP per capita) and other indicators.There are 1.3billion people there and they are currently cheap. In the PPP they have a lot of room to grow. Beyond typical economic indicators it's interesting to analyze what are their current asymptotes limiting China (economically) in the future: creativity? democracy? social unrest? bureaucracy?

88 points by danhak 16y ago

known 16y ago

And the weird thing is China ranks 89 and Pakistan 85 in http://www.doingbusiness.org/economyrankings/ http://www.doingbusiness.org/economyrankings/

IdeaHamster 16y ago

Read to the second page, especially this: Global companies like 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. I am, personally, familiar with the movement of R&D to China. This, alone, makes me believe that this is not a flash-in-the-pan, but a genuine long term trend. Also, as I recall the original estimate for when China would become #1 auto consumer was 2012. They beat that by 3 years. So, I would hazard a guess that it won't take them all the way to 2030 to become economy #1. What will be really interesting about that, though, is that due to population size alone, they will still have a far, far smaller per-capita income than the U.S.

mkr-hn 16y ago
Over a billion people with increasing incomes and opportunity is going to create a lot of amazing things if they can manage the growth properly.
nostromo 16y ago
It's hard for me to envision it being too much earlier than that -- take a look at this chart: http://www.google.com/publicdata?ds=wb-wdi&ctype=l&strail=false&nselm=h&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=country&idim=country:CHN:USA&tstart=-315619200000&tunit=Y&tlen=48&hl=en&dl=en http://www.google.com/publicdata?ds=wb-wdi&ctype=l&s... -- it's not like the US isn't a moving target. Especially if the US and EU get serious about alleged currency manipulation -- it's funny to see a graph of US to Yuan stay virtually flat for many years dispite their economic growth: http://www.google.com/finance/chart?q=CURRENCY:CNYUSD&tkr=1&p=5Y http://www.google.com/finance/chart?q=CURRENCY:CNYUSD&tk... -- compare that to organic exchange rates: http://www.google.com/finance/chart?q=CURRENCY:CNYEUR&tkr=1&p=5Y http://www.google.com/finance/chart?q=CURRENCY:CNYEUR&tk... and http://www.google.com/finance/chart?q=CURRENCY:GBPUSD&tkr=1&p=5Y http://www.google.com/finance/chart?q=CURRENCY:GBPUSD&tk... Btw, it seems China is the world's largest auto market by units sold, not by dollars/yuan sold -- which is an odd way to think about it. Cars are significantly cheaper in China.
- eru 16y ago
  "GDP in current U.S. dollars. Not adjusted for inflation." It would be nice to see the inflation adjusted figures.
niekmaas 16y ago
It's also interesting to note that China's economy is not just about low-tech anymore but gradually become more and more higher-tech. Where Chinese cities welcomed all the cheap toy factories a couple of yours ago, I remember reading a Washington Post China article about the fact that certain areas in China ban these kind of factories now. These areas only want higher (not high) tech factories to reach out to different employees and investors. The low tech (toy) companies now move to Vietnam/Laos etc.
c1sc0 16y ago
Remember that article a while ago that China was setting up more sequencing capacity in a single building than the whole US combined? For now they're still buying US-made Illumina machines, but I'd expect them to come up with their own technology soon.

amichail 16y ago

Is there any danger to English as a universal language for the internet, business, education, and research? Will we need to learn Chinese in a decade or two?

patio11 16y ago
There are much more compelling reasons for Chinese people to learn English than there are for foreigners to learn Chinese, though it certainly won't hurt your job prospects. For one, if you learn to speak Chinese you get improved job prospects vis-a-vis two countries. (Yeah, I went there, PRC.) A Chinese person who learns English gets instant access to the US, Anglosphere, Japan (well, cough, theoretically speaking), Western Europe, etc etc. (Same for Japanese, too. I get "You should have studied Chinese!" all the time, as if these islands had sunken into the ocean after the bubble burst and do not still outrank every European country in trade with the US.)
- pvg 16y ago
  Not that I think we'll be all be buckling down to master Mandarin in our lifetimes but the lingua franca does sometimes change as the expression itself suggests. as if these islands had sunken into the ocean after the bubble burst and do not still outrank every European country in trade with the US By that measure, we should all study Canadian and Mexican as well! http://www.census.gov/foreign-trade/top/dst/current/balance.html http://www.census.gov/foreign-trade/top/dst/current/balance....
  - byw 16y ago
    Isn't Spanish the most learned foreign language by far in the States? http://www.vistawide.com/languages/us_languages.htm http://www.vistawide.com/languages/us_languages.htm
    - patio11 16y ago
      Yes. Not a wonderful choice for career opportunities unless you enjoy competing with millions of native bilinguals, by the way.

younata 16y ago

I love how it's talking about china being #2, with a $1.33 trillion gdp, then it drops US's $14 trillion gdp, as if it's an easy to achieve milestone. I have no fears that china will outpace the US, for a number of reasons.

ryanlchan 16y ago
Perhaps not, but it certainly says something about the fragility of the US monopole mentality. Even if they get to just half of the US GDP, it would be a major coup for China.
- ovi256 16y ago
  >Even if they get to just half of the US GDP They almost did, $1.33 trillions is quarterly GDP, they need 20% more. They'll get that in a few years. Resource exhaustion will become a soft limit pretty fast. I don't believe in Malthusian hard limits, but extraction and distribution systems may grow more slowly than demand even without hard resource limits.
borisk 16y ago
$1.33 trillion is China quarter GDP, $14 trillion is US yearly GDP. And the second includes many trillions of financial "product". http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mktp_cd&idim=country:CHN&dl=en&hl=en&q=china+gdp#met=ny_gdp_mktp_cd&idim=country:CHN:JPN:USA http://www.google.com/publicdata?ds=wb-wdi&met=ny_gdp_mk...
- sqrt17 16y ago
  The EU has $16 trillion yearly GDP. Wouldn't that make China #3? (The Eurozone alone has ~$10 trillion yearly). Don't come with the argument of, "oh they have all different governments and all different languages". State governments in the US hold a great fraction of legislative power (to the point where you're not a US lawyer, but a WA, TX or CL lawyer), and provinces in China have local languages (yes, languages - there's a point to using an ideographic writing system because you can use it for languages other than Mandarin) and not everyone speaks Mandarin.

keyle 16y ago

Well, well, this reminded me why they speak Chinese in Firefly.

WildUtah 16y ago
But it doesn't explain why there are no actual Chinese people on Firefly. This does explain it: http://www.youtube.com/watch?v=MNmzegQUtFA http://www.youtube.com/watch?v=MNmzegQUtFA
- vorg 16y ago
  But bet it doesn't explain why you can't access that website and video from within China's borders!!!

nopassrecover 16y ago

I find it pretty amazing that Japan was second for so long given the country's relatively small size and its 19th and 20th century history.

fgf 16y ago
I don't.. It's population is as big as russias and bigger than any other nation with a comparable average national IQ (besides the US) and some kind of capitalism. I can't think of a single example of this combination not leading to convergence with the highest gdp capita countries.
- nopassrecover 16y ago
  I guess this is the key. Still the nation went from a level of pre-industrialization and through the devastation of the second world war to be the second largest economy in te world. If I understand correctly the economy has been relatively stagnant for sometime too and has still held its position.
  - eru 16y ago
    The numbers for Germany aren't too dissimilar.

artpop 16y ago

This and discovering water on Mars are my two all time déjà vu news articles.

known 16y ago

I think management team and shareholders should also go and live in China if they're sending jobs there.

uuoc 16y ago

Please do not post links to the NYTimes paywall.

wslh 16y ago

It's interesting to follow China ranking not just in the GDP but in PPP (GDP per capita) and other indicators.There are 1.3billion people there and they are currently cheap. In the PPP they have a lot of room to grow. Beyond typical economic indicators it's interesting to analyze what are their current asymptotes limiting China (economically) in the future: creativity? democracy? social unrest? bureaucracy?