China’s economy ranked third in 2007
Based on the latest data, China became the third-largest world in economy in 2007, treading on the heels of Japan and the United States.
China’s economy has boomed in the past 30 year. Data showed that China has been ahead of Germany. But overtaking the US is another matter.
According to Merrill Lynch economist Ting Lu, it will only take China three to four years to replace Japan being the second-largest economy in the world, but catching up with the US could take decades.
There’s a sharp contrast in China that Chinese people are the world’s poorest on average while China has experienced an explosive growth as it transformed from a long-isolated nation to the world’s factory.
The estimate of 2007 growth has already been revised by the government from 11.9% to 13%, which is the fastest rate since 1994.
The statistics bureau said that the new estimate raised gross domestic product to 25.7 trillion yuan, or $3.5 trillion at 2007 exchange rates. That would be ahead of Germany’s 2007 GDP of 2.4 trillion euros, or $3.3 trillion at an exchange rate produced by averaging rates on the 15th of each month during that year.
The revision appears with China’s export-driven economy struggling to reverse a slump caused by global crisis and ease the worsening situation.
A $586 billion stimulus package is announced by the government who is taking the oath that they will help struggling exporters. China’s export fell with a fastest rate in a decade last month. The Cabinet cut fuel prices and a tax on auto sales yesterday.
The change in economic ranking won’t help China out of its slump, according to Moody’s Economy.com analyst Sherman Chan.
The only effect is perhaps negative that the slowdown in 2008 would be more upsetting comparing with the stronger 2007, Chan said in a report.
The US’s economy ranked the first place with $13.8 trillion in 2007, followed by Japan at $4.4 trillion. Germany’s 85 million people were still far ahead of China in GDP per person in 2007 at $38,800.
The per capita GDP of China was $2,800 in 2007, but many people in China live on far less than that due to the large population. Chinese officials say more than 100 other countries have a higher income per person.
The data from International Monetary Fund showed that the GDP was just $300 billion three decades ago in 1979, which was one tenth of the level in 2007.
The living standard of Chinese people has been greatly improved and cities been modern with forests of skyscrapers and private cars in the streets.
It is estimated that China’s economy grew would get another 9% in spite of the economic slowdown. Figures for 2008 are expected to be unveiled this month.
But the economic growth rate of 6% has been slashed by economists, the number which would be the highest for any major economy but is worrisome for country leaders who need to make public satisfied through raising their incomes and easing the tight job market.
China still needs decades to overtake US, even if US gets no growth in economy.
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