world growth

world growth

Monday, December 28, 2009

China's GDP per capita to reach $4,000 next year

China's GDP per capita is expected to climb to 4,000 U.S. dollars by the end of next year, according to the 2010 social blue book issued Monday.

According to Li Peilin, director of the Sociology Institute of the Chinese Academy of Social Sciences, which compiled the book, GDP per capita has been growing rapidly in recent years.

"From 1978 to 2000, GDP per capita in China increased from $400 to $800, which took 20 years. When we set the goal in 2000 to build up a well-off society by 2020, the forecast was to double the GDP per capita within 20 years, jumping to more than $3,000 in 2020," he said.

The report, Society of China: Analysis and Forecast 2010, said rapid economic growth, decline in the new population and appreciation of the renminbi contributed to the acceleration of the growth rate.

The GDP per capita refers to the average value of goods produced per person in a given country.

GDP per capita exceeded $1,000 in 2003 and jumped to $3,000 in 2008, so it will approach $4,000 next year, achieving the target ahead of time.

"A $4,000 GDP per capita means an increased strength of domestic capital, which will help the employment of migrant workers and college students," Chen Yan, chief writer at Economy magazine, told the Global Times Monday.

The blue book also pointed out that the annual income of urban residents could increase by 10 percent this year but rural residents' income will only increase by 6 percent to 7 percent.

"The income of people in rural areas reduced under the influence of financial crisis in 2009. The income gap between urban and rural residents will widen," Li said.

During the first three quarters, the employment situation remained stable, with 8.15 million more people in urban areas getting jobs. The number is expected to reach 11 million this year.

There are 9.15 million registered unemployed urban residents, with an unemployment rate of 4.3 percent.

Thanks to government efforts, college graduates' employment rate reached 74 percent by September 1 but the average salary for graduates fell.

However, nearly 83 percent of the population said they were optimistic about the employment situation in 2010 and the confidence index jumped by 1.3 percent compared with last year, according to a survey conducted recently by Beijing-based China Mainland Marketing Research Company.

Sunday, December 20, 2009

Time Sees ‘Chinese Worker’as Economic Savior

The reasons Time magazine gave for naming Ben Bernanke its Person of the Year centered on the Fed chairman helping to “ensure that 2009 was a period of weak recovery rather than catastrophic depression.”

For similar reasons the magazine listed on its list of runners-up “the Chinese worker,” a nod to another factor – or rather tens of millions of them — in keeping the world from tipping into the economic abyss.

In its motivation, Time mentioned the term baoba, or “maintain eight”, a reference to China’s 8% growth targets and said, “A year ago, many thought hitting such a figure in 2009 was a pipe dream. But China has done it, and this year it remains the world’s fastest-growing major economy — and an economic stimulus for everyone else. Who deserves the credit? Above all, the tens of millions of workers who have left their homes, and often their families, to find work in the factories of China’s booming coastal cities.”

The nomination might have seemed weirdly anonymous, lumping together under one label millions of individuals who might have little in common except as a symbol, but Time accompanied the entry with eight (ba!) photos of workers at an LED factory in Shenzhen, an apparent attempt at giving “the Chinese worker” a face (though it’s still not clear who would have been invited to the awards ceremony if there is such a thing).

But as heroic as the Chinese worker is, it deserves to be said that without massive stimulus efforts by the Chinese government that started late last year, he or she might not have a job to go to. Indeed, in the early months of this year, jobs were lost to the tune of 20 million-plus. Also, workers in the coastal factories, which make many of the goods China exports, are dependent on global demand rather than a driver of it.

Still, China has certainly driven much of the economic discourse this year. On the list of Time’s “People Who Mattered” was People’s Bank of China Governor Zhou Xiaochuan. Motivation: “Even with China’s growing international economic clout, the mandarins who run the rapidly growing economy tend be faceless — and cautious to the extreme. That’s why when Zhou Xiaochuan publicly called in March for the U.S. dollar to be eventually replaced as the globe’s reserve currency, the world took note.”

The March proposal, which is still widely discussed, brought home the image of China as an increasingly assertive participant on the world economic stage, one calling for a global economic order less dominated by the U.S. and other wealthy nations.

In a poll on Time’s Web site to let readers weigh in on who they think was the most influential person in 2009, Zhou was in ninth place at last look (the list was topped by Chesley B. (Sully) Sullenberger, the pilot who successfully landed a US Airways plane on the Hudson River last January), showing that while non-Chinese still dominate Time’s influential-people lists, at least China’s equivalent to Bernanke has acquired name recognition.

Sunday, December 13, 2009

Nearly 13 million cars will be sold in China in 2009

Chinese car market overtakes that of United States

SHANGHAI — China has overtaken the U.S. as the world's biggest market for automobiles, the first time any other country has bought more vehicles than the nation that produced Henry Ford, the Cadillac and the minivan.

Now that the Chinese buy more cars and trucks than Americans, the shift could produce ripples for the environment, gas prices and even the kinds of cars automakers design.

More than 12.7 million cars and trucks will be sold in China this year, up 44 percent from the previous year and surpassing the 10.3 million forecast in the U.S., according to J.D. Power and Associates.

China has long been expected to overtake the U.S. since its population of 1.3 billion is more than quadruple that of the United States. But the increase in sales happened much faster than anyone expected because of China's tax cuts, its stimulus program and a depressed American market.

Two years ago, J.D. Power predicted China would pass the U.S. in 2025. Earlier this year, it forecast 2009 sales of just 9 million vehicles for China.

After a sharp slowdown in auto sales late last year, the Chinese government cut taxes on small cars and spent $730 million on subsidies to encourage sales of SUVs, pickups and minivans. A big stimulus program also boosted truck sales by pumping money into construction.

Auto sales were expected to rise with China's stimulus, but they have far exceeded expectations, said Jeff Schuster, J.D. Power's executive director of automotive forecasting.

Most experts think the top-sales title will shift back and forth between China and the United States for the next several years, with China ultimately prevailing.

Improving sales of autos and other big-ticket items is key to Beijing's strategy to promote stronger domestic consumption and lower dependence on exports.

"The government has sent a very clear message that they will not let the auto industry weaken, especially in 2010," say Jia Xinguang, chief analyst at China National Automotive Industry Consulting & Developing Corp.

Meanwhile, U.S. sales hit a 26-year low in early 2009 and remain well below the 17 million average from earlier this decade.

China's growing auto market is sure to affect the industry worldwide. Some key factors are:

_ CHINA'S CAR POLLUTION: It's gotten worse. China's fleet is newer, and big cities have imposed emissions standards that exceed those in the U.S., but lax enforcement of standards is a major problem. Vehicles may meet standards at first but then degrade over time.

On top of that, the number of vehicles on China's roads is soaring, although it's still a fraction of the U.S.

_ FUEL DEMAND: Global demand for oil is rising, fueled by China and India. Most energy experts agree that demand for crude has peaked in the U.S. Meanwhile, China's demand for oil used in transportation could more than double between 2007 and 2020, according to the World Energy Outlook, a joint study by the Organization for Economic Cooperation and Development and the International Energy Agency.

At home, China struggles both with the amount and quality of its fuel supply. A study by Harvard researchers found that refiners were not supplying fuel that was good enough to meet the country's rising emissions standards.

The cost of oil is prompting China to encourage a shift to cars and trucks that are more fuel efficient or run on batteries and alternative fuels. The government has raised taxes on gas guzzlers. China is the world's No. 3 net importer after the U.S. and Japan.

_ VEHICLE DESIGN: The Chinese will have more influence over vehicle design as they buy more cars. GM had its Chinese team design the 2010 Buick LaCrosse because the brand sells better in China than in the U.S. Buick is considered a luxury car in China.

The designers included sumptuous back seats for executives with drivers. They also used Feng shui principles and swooping designs based on Chinese art.

Chinese automakers will emerge stronger from the sales boom. BYD Co. aims to overtake Toyota as the global auto leader by 2030. Among BYD's backers is billionaire investor Warren Buffett.

China's sales may grow so large that cars designed for Chinese tastes are sold globally, the way U.S. vehicles are now. But some experts doubt that will happen until Chinese automakers become competitive on style and quality.

Meanwhile, as China's middle class expands, Chinese car shoppers are developing tastes similar to those of drivers in the U.S. and other wealthy nations.

"I talk to my friends in Beijing," says Crystal Jiang, a professor at Bryant University in Smithfield, R.I., who studies globalization. "I drive a Subaru, they also drive a Subaru."

Sunday, December 6, 2009

China becomes Colombia's second-largest trading partner

Looks like China is making more inroads in South America.

China has replaced Venezuela as Colombia's second-largest trading partner, as Colombia's oil exports to China have multiplied more than 50-fold over the last year.

Colombian exports of crude, fuels and derivatives to China totaled $235 million in the first 10 months of 2009, up from $4.5 million in the same period in 2008, according to data from Colombia's national statistics agency, or DANE, released Thursday.

"China is investing heavily in Latin America looking to get hold of commodities, which is likely to continue," said Bertrand Delgado, a New York-based research analyst for emerging markets and Latin America at RGE Monitor. "The problem is that Colombia's exports to Venezuela are mainly value-added, while exporting oil is just raw materials. When you try to advance as an economy you try to export as many value-added products as you can."

Colombia's exports to China were valued at $115 million in October, up from $15 million in October 2008. Most of the rise is due to increased exports of crude and oil derivatives, a DANE spokesperson said.

"This year we have shipped 6 cargoes of 1 million barrels [of heavy crude mixed with naphtha] each to China," said Mauricio Tellez, a spokesman for Colombia's state-controlled oil company Ecopetrol SA (ECOPETROL.BO).

Venezuela is traditionally Colombia's second-largest trading partner, after the U.S., but trade between the two neighbors slumped in the third quarter due a diplomatic dispute over the U.S. military presence in Colombia.

Colombian exports to Venezuela in October fell 70% to $195 million on October 2008, after Venezuelan President Hugo Chavez said his country will substitute Colombian imports with products from other countries.

Colombian President Alvaro Uribe Wednesday said Venezuela is currently enforcing an embargo against Colombia and other Latin American countries are taking advantage to substitute Colombian products on the Venezuelan market.