By: Mike Campbell
Many people think that China will soon overtake Japan as the world’s second largest economy – particularly in view of the plight that Japan finds itself in currently with deflationary pressure; record unemployment; poor consumer confidence and an unrealistically strong currency. It has just wrested the laurels of the world’s leading exporting nation from Germany. Figures for December’s exports were up 17.7% year-on-year and finally broke the trend of thirteen months of decline; the results of the global economic recession. According to the Xinhua news agency, China’s exports for 2009 were worth $1.2tn despite a near 14% decline in foreign trade. The nation’s total trade surplus was $196bn, a decline of 34% over the previous year. The USA has repeatedly argued that the value of the Chinese Yuan is being kept artificially low which makes Chinese exports more affordable. The Americans are also concerned about certain measures that the Chinese take which they say amount to dumping products at prices well below their natural prices; notably tires and steel.
China Overtakes America As The World’s Largest Motor Vehicle Market
Until very recently, the USA was the world’s largest car and van market with annual sales coming in at around the 10 000 000 mark. However, according to the China Association of Automobile Manufacturers, sales within the world’s most populace nation reached 13.6 million in 2009. The figures were no doubt boosted by the government’s own stimulus package which reduced the sales tax applicable for small cars. In terms of the potential demand between the two countries, the USA has a population of approximately 200 million whereas China is home to some 1.3 billion people – of course the average income between the two nations is radically different with the per capita income of Americans being approximately $47500 compared to just $2940 in the People’s Republic of China.
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