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China to outstrip US by 2016 – IMF
Published: 10 August, 2011, 09:38
TAGS: Asia, Crisis, Currencies, China, USA, Yulia Shapovalova, Priya Sridhar, Finance, Global economy
Many analysts are predicting a power shift in the financial arena quite soon, since according to International Monetary Fund projections, China could leapfrog the United States to become the world's largest economy by 2016.
Many have thought this likely for quite a while, and the latest news regarding the US debt-ceiling debate and the US’s credit rating being downgraded is leading even more people to believe that this is going to happen even sooner than expected.
China’s economy has actually grown by 45 per cent since 2007, while the GDP of the United States has grown by less than one per cent since then. The latest International Monetary Fund predictions show that China’s economy will actually overtake the US economy by 2016. And that will be the first time in more than a century that the US economy is not the biggest in the world.
A lot of people say that China’s economy focuses on exports, but they really have managed to diversify their economy. China is obviously seen as the manufacturing hub of the world, which has been able to create millions jobs for its low-skilled workers. But they have also been focusing a lot on technology, which has created millions of jobs for high-skilled workers as well.
The Chinese have been focused on retaining jobs domestically, and making sure that foreign investors are not able to compete with certain domestic industries, which is something that most countries cannot figure out. It is also important to know that China’s economy is still very much state led. And with the government controlling most of the financial sector, China’s banks have been relatively well shielded during the financial crisis.
In the long run, Asian countries are better equipped to deal with the financial crisis. Many investors who follow the path of risk aversion and are therefore moving away from US treasury bonds have started investing more in Asian markets like India and China, RT’s Priya Sridhar says.
Many people in Asia see the situation as an opportunity for a shift in the financial arena and for more of the international community to get onboard and move away from a dollar as a reserve currency.
10.08.2011, 05:30
3 comments
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Aleksandar Hranov wrote in#3
There, perhaps my parents will finally understand why I'm against my child learning English: it will soon be as useful as Latin. Mandarine, Hindi or Russian are all better choices for the future.
English is still the language to learn and will be for rest of this century most likely.
The chinese have already realised this and are now teaching english to almost all students and India's elite already speak english as an official language.
China,China...Im sick of hearing it there economy is not doing well either and they are rapidly growing which to much expansion is never a smart,not to mention that they can't even support there own people.The usa will be a financial power for a longer time to come.Whethe people like it or not i would never want a communist country like china to control are world,They do not stand for liberty or there people wishful thinking though.the media stirs too much hoping for the us decline,let this be a lesson learn for the us.
the usa, and europe need to learn alot from China, but they are too corrupted to learn anything, and hopeless. i am really sick of the world being dominated by the usa, and europe. i think that 300 years of western imperialism is enough. enough people have died and suffered under european and american terrorism, and military aggression. China would be a great choice as a world leader. i have studied their history and they are noble people, unlike those europeans and americans who have raped, robbed, and pillaged the world for the past 300 yrs, and continue to do so in a savagely manner. i also hope that my children do not learn english, as it is the language of imperialists imposed upon the people. the west are oppressing people around the world and must be stopped. unfortunately, i do not think they will go peacefully. if they cant have it all, i think they will just blow everyone up.