Chinese economy overcoming the U.S. and the EU?

[administrator]

China's economy is moving on the desired track
17.4.2008, Xinhua
BEIJING -- China's economy is moving on the desired track of macro-economic control, according to an executive meeting of the State Council, the Cabinet, held on Wednesday. "China has achieved great success in fighting the snow havoc and restoration work in snow and ice hit areas. The country's economy is maintaining stable growth momentum," said the meeting presided over by Chinese Premier Wen Jiabao. The meeting pointed out that the agriculture sector is developing stably, the industry sector sees rapid growth and the country's economic restructuring has made new headway with the reform and opening-up continuing to move forward, adding that "the overall economic situation is better than expected." China has maintained steady, rapid growth so far this year, despite the worst winter here in half a century and the spreading global credit crisis, with its economic growth slowed to 10.6 percent in the first quarter from 11.7 percent in the same period last year, said the National Bureau of Statistics (NBS) on Wednesday. The meeting also said the country is facing a complex and challenging global economy environment with the lagging pace of world economic growth, uncertainties on global financial market and the rising price of grain, oil and other raw materials. China's consumer price index (CPI), a key measure of inflation, was up 8.3 percent in March, following an 8.7 percent rise recorded for the previous month, according to the NBS. Food prices soared 21 percent in the first quarter year on year. Prices of raw materials, fuels and power supply increased 9.8 percent in the first three months of this year, 5.7 percentage points higher than the level for the same period last year. The meeting described the high price as the most prominent problem afflicting the current domestic economy, adding that the fixed asset investment growth pace is still quick. NBS figures showed that the country's fixed asset investment reached 2.18 trillion yuan ($311 billion) in the first quarter, up 24.6 percent year on year, which was 0.9 percentage points higher than a year ago. The meeting reiterated that the government would continue adopting the tight monetary policy and prudent fiscal policy and to prevent an overheating economy and guard against a shift from structural price rises to evident inflation. The People's Bank of China (PBOC), China's central bank said on Wednesday the reserve requirement ratio would be raised by 0.5 percentage points to a record high of 16 percent as of April 25. "The rise, a further materialization of tight monetary policy, is aimed at strengthening liquidity management in the banking system and steering bank credits to grow reasonably," the PBOC stated.
http://www.chinadaily.com.cn/china/2008-04/17/content_6623623.htm

[indigo]

China's economy is moving on the desired track

China to overtake US as largest manufacturer
The Financial Times 10.10.2008
China is set to overtake the US next year as the world’s largest producer of manufactured goods, four years earlier than expected, as a result of the rapidly weakening US economy. The great leap is revealed in forecasts for the Financial Times by Global Insight, a US economics consultancy. According to the estimates, next year China will account for 17 per cent of manufacturing value-added output of $11,783bn and the US will make 16 per cent. Last year the US was still easily in the top slot and accounted for a fifth of the total. China was second with 13.2 per cent. John Engler, president of the National Association of Manufacturers, a Washington-based trade group, played down the effect of the projections. It was “inevitable” that China would take over on account of its size, he said. “This should be a wholesome development for the US, for it promises both political stability for the world’s largest country and continuing opportunities for the US to export to, and invest in, the world’s fastest-growing economy.” As recently as last year, Global Insight economists predicted that the US would retain the top position until 2013, but a large downward revision in likely output this year and next is expected to cause the US to slip more quickly than had been expected. The data underline the surge of China’s manufacturing-led economy in the past 20 years. In 1990, before economic reforms began to work, it accounted for a meagre 3 per cent of global manufacturing. Manufacturing accounted for just 17.5 per cent of global gross domestic product in 2007, but much activity in the considerably larger area of services, for instance in retailing, distribution, transport and communications, depends on it. The expected change will end more than a 100 years of US dominance. It returns China to a position it occupied, according to economic historians, for some 1,800 years up to about 1840, when Britain became the world’s biggest manufacturer after its Industrial Revolution. Global Insight counts manufacturing production for countries – including the activity of foreign-owned companies and local ones – as value-added output. Value-added data are arrived at by subtracting “inputs” – such as purchases of materials, parts and services – from raw “gross output” as measured by the sales of individual companies. The data also use current-year figures. If inflation adjustments are used to put the numbers in constant prices, the expected US position looks better, because its inflation over this period is predicted to be lower than China’s.
http://www.ft.com/cms/s/0/2aa7a12e-6709-11dd-808f-0000779fd18c.html?nclick_check=1