I will post the pictures of Chinese cities so that you can differentiate what a difference a decade or two can make if Chnia is really making progress.
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China buys and sells the Great Helmsman’s economic vision
When Mao Zedong was immortalised with formaldehyde in 1976, after 27 years at the top, the Great Helmsman had fallen 87 per cent short of his goal of equalling the size of America’s economy. While Americans discovered wealth like the world had never seen before, Chinese incomes had fallen.
Official statistics released this week show the Chinese economy has more than made up for lost time in the 27 years since Mao.
China’s economy grew 9.1 per cent in 2003 to $US1.41 trillion ($1.83 trillion) at nominal exchange rates. This was despite the impacts of SARS and a depressed global economy in the first half.
** When adjustments are made for purchasing power parity (PPP), economic production was more like $US6.65 trillion - making it easily the world’s second biggest economy. **
The Chinese economy has grown from being 13 per cent of the size of the American economy when Mao died to 60 per cent (in PPP terms), and has transformed the global economy along the way.
** As demonstrated by the skylines of Shanghai and Beijing, China devoured a third of the world’s steel production last year - single-handedly boosting the prices of iron ore and nickel. It also consumed more than half of the world’s cement.
Seemingly inexhaustible Chinese factories have produced so much so efficiently that prices for the world’s tradeable goods continue to fall while quality improves.
Last year China accounted for a third of the world’s GDP growth, half of its growth in trade and more than half of its international direct investment. **
The implications for Australia are plain.
November’s monthly data shows China jumped from fourth to second on Australia’s export charts (behind Japan), in line with a regional trend that has seen China replace Japan and the US as East Asia’s most important export market.
China has pushed Australia’s export prices up and import prices down, inverting the century-long deterioration in terms of trade.
If China can maintain its extraordinary growth record, then Australia may be on the cusp of its greatest resources boom.
On current trends, of 3 per cent growth in the US and 8 per cent growth in China, China will be the biggest economy in the world by 2015.