Bozur
Amicus
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Post by Bozur on Jan 12, 2006 2:44:14 GMT -5
China says it grew faster than first thought Millions of firms in the services and other sectors were unaccounted for, country is now sixth-largest economy in the world DAVID BARBOZA Posted online: Wednesday, December 21, 2005 SHANGHAI, DECEMBER 20: China said on Tuesday that its economy, the fastest growing in the world, is larger than it had previously reported.
The government reported this morning that its gross domestic product (GDP) was nearly $2 trillion in 2004, not $1.6 trillion as it had previously reported, according to the National Bureau of Statistics. The nationwide survey suggests that China’s economic growth is an even more influential factor in the global markets and that its people are even richer and consume more than previously estimated. The new figures also suggest that China is set to overtake Britain and France to become the world’s fourth-largest economy this year, ranking behind the United States, which has a gross domestic product of about $12.6 trillion, Japan and Germany. The government said the census discovered that millions of companies in the service and other sectors had been previously unaccounted for in the nation’s economic statistics.
Last year, for instance, China said, its economic output was nearly 17 per cent, or more than $250 billion, larger than previously reported.
The revisions are certain to result in significant changes in the way economists assess the Chinese economy, investment in the country and perhaps its role in the global markets. Many economists have already praised the figures as a step forward in understanding how the Chinese economy works, and in evaluating investment opportunities.
For years, economists have raised doubts about some of China’s statistics, and even published their own estimates of the economy and its rate of growth. “It’s all good,” said Stephen Green, senior economist at Standard Chartered Bank. “A bigger economy means all the dangerous ratios, such as investment as a percentage of GDP, all fall. And they are usually cited as showing that the Chinese economy is in danger or headed for a fall.” — NYT
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Bozur
Amicus
Posts: 5,515
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Post by Bozur on Jan 12, 2006 2:46:43 GMT -5
Trade Surplus Tripled in '05, China Says
By DAVID BARBOZA Published: January 12, 2006
SHANGHAI, Jan. 11 - China said on Wednesday that its trade surplus with the rest of the world had tripled in 2005, to a record $102 billion, a figure that could reignite global trade frictions and step up pressure on the government to allow its currency to appreciate further.
The United States and European Union officials have been pressuring China during the last few years to allow its currency to appreciate. The hope is to restrain the flood of Chinese exports to the world and to rebalance China's economy to allow for more imports.
The report on Wednesday showed that imports into China had begun to rise and exports to the rest of the world had slowed in the latter part of 2005, easing concern among some economists.
Still, China released a set of blockbuster trade figures that were another reflection of the nation's unparalleled rise as a global economic power.
The government said that exports in 2005 were a record $762 billion, up 28 percent, while imports climbed to $660 billion, up nearly 18 percent, from 2004. The $102 billion surplus was up from about $32 billion in 2004.
Total foreign trade in 2005 topped $1.4 trillion, making China No. 3 in the world in foreign trade after the United States and Germany and ahead of Japan.
Just a decade ago, the value of China's foreign trade was only $289 billion. But today, a giant portion of the world's toys, clothing, furniture and electronic goods carry the label "Made in China."
Indeed, the customs figures released on Wednesday showed that the bulk of China's trade surplus in 2005 came from exports to the world's wealthiest regions, particularly the United States and Europe. The surplus with the United States reached a record $114.7 billion, up from $80 billion a year earlier and $28 billion in 2001. Excluding the United States, China actually had a trade deficit with the rest of the world of about $12 billion in 2005, largely with South Korea, Japan, Malaysia, Saudi Arabia and even Angola.
And yet China's figures may not be telling the entire story. According to United States government data, China's trade surplus in 2005 could be nearly $200 billion. Just through October 2005, according to official government statistics in the United States, China already had a trade surplus with the United States of over $166 billion. The gap arises from differences in counting, like whether Hong Kong figures are integrated with those of China. The growing bilateral trade deficit could strain ties between the United States and China. In 2004, the United States had a record $617 billion trade deficit with the rest of the world, and it is on track to break that record.
In Beijing on Tuesday, Senator Max Baucus, Democrat of Montana, called on China to do its part to reduce its deficit with the United States, calling on the country to allow its currency to appreciate.
"U.S. politics will become unmanageable if China's trade deficit with the U.S. continues to grow," Senator Baucus said. He was on a trip through Asia to assess trade relations. He added: "It is in China's interest to make concrete progress in reducing the trade imbalance."
Europe fared only slightly better last year, according to the Chinese government. China reported a $70 billion trade surplus in 2005 with the European Union, with the Netherlands and Britain having notable imbalances.
The trade figures suggest a changing role for China in the global economy, indicating that it will influence things like prices at Wal-Mart and global interest rates.
When 2005 economic statistics are complete, China is likely to be home to the fourth- or fifth-largest economy in the world, surpassing France, Italy and possibly Britain.
The government last month readjusted its gross domestic product figure by $280 billion to account for previously unreported activity. That suggests that the Chinese economy probably grew as much as 10 percent annually in many of the last few years.
China may also soon have more foreign currency reserves than any other country in the world, giving it even more influence on global interest rates. As of November, China reported having about $794 billion in foreign currency reserves, just behind Japan, which had about $828 billion at the end of last year.
Last year, China revalued its currency, ending a decade-long peg to the American dollar, allowing it to appreciate by more than 2 percent. China also reached separate textile trade agreements with the United States and the European Union after Chinese textile and apparel exports flooded those markets with the end of global quotas in January.
American and European officials have argued that the weak value of the Chinese currency, the yuan, gave China an unfair advantage in world markets, making its goods extremely cheap.
As China has grown into an economic power, it has racked up trade surpluses of about $350 billion over the last decade, according to Chinese customs data. And yet, some economists say those figures may still misstate the country's real gains because a large portion of goods are funneled through Hong Kong.
Government figures from other parts of the world are at variance with Chinese government statistics.
For example, the Commerce Department said that in 2004, China had a $162 billion trade surplus with the United States. And last year, through October, the surplus was $166 billion, which suggests that China's trade surplus last year was double what the government reported in its own figures.
China's figures do, however, suggest that in the second half of the year, export growth eased some from gains of more than 30 percent earlier in the year, and imports picked up from the low double digits.
Jonathan Anderson, an economist at UBS, calls the record trade surplus "old news," because it has already begun to fall.
"This is not a harbinger of things to come," he says. "If you look at the numbers seasonably adjusted, things peaked at the middle of the year. Exports are now slowing down and imports are picking up."
But even if trade begins to balance, some economists think that 2006 will not be much different from 2005. China could report another $100 billion surplus, though the growth rate may moderate slightly.
"If you do the math, you'll need imports to more than double the size of exports to begin to close these gaps," an economist for Goldman Sachs, Hong Liang, said. "China's trade surpluses will continue to rise."
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