Wednesday, November 10, 2010

China To Have The Biggest Economy In 2 Years

Here’s a finding that will have any red-blooded American spluttering into his cornflakes. According to the Conference Board, a highly respected economic research association, China will overtake the US as the world’s biggest economy by 2012, or within two years.
OK, so in dollar terms, that’s obviously not going to be the case. It will be a lot longer than two years before China overtakes the US on that measure. But in terms of purchasing power parity, according to the Conference Board’s latest world economic outlook, China is already nearly there, and by 2020 will have reached a size of output which is nearly half as big again as the US.
More Here..


  1. China it seems to me, is already the biggest labor value creator of industrial wealth ,in the world today .
    But 40% of that production is exported at cheap labor prices value .Therefore its internal GDP is a sum of that including its export commodities as counted in dollars.
    most of the export trade was in the hands of multinational companies like Wal-mart able to buy the goodies at the cheap labor 'china price"
    The "China price" was determined by the ability of Chinese manufacturers and foreign partners to make at least the average rate of profit in China.
    If they sold the commodities below their labor created value wholesale they could still make often above average Chinese profits on their capital, while still selling the export commodities below their real labor created value of $5
    Thus after taking their own cut the Chinese capitalists were able to hand over the rest of the cheap labor profits to the buyer, these were passed on in the 'china price" to the Wal- Marts etc., who controlled the markets and distribution of commodities in America.
    Wal mart then sold the "china priced" commodities at their full value in retail and still make great profits . Because that wal -mart retail price, was still a cheaper price than for high waged american commodities.
    A million pairs of sox produced in China might have a raw material cost say 20 cents a pair + gradual wear on the cost ,say 1 cent per each pair + a cheap labor cost in using the machinery to convert the raw materials into a new higher value but still very competitive product.
    The result was cheap labor produced sox in China that had a new and real "free trade" world labor created value of say $5.
    This $5 Representing the replacement value of the raw materials ,the cost of the cheap labor and wear and tear on the machinery + plus an average profit on the exploited cheap labor created profit for Chinese capital.
    In the Chinese competition then the Chinese manufacturers were happy, if they could get as their own profit, their own cut in the cheap labor profits ,just as long their own rate of investment return was greater than if they had invested their capital elsewhere in the Chinese economy.
    They may have been able to sell these Sox wholesale profitably in bulk for say 60 cents a pair.
    Wall Mart may then have sold the sox to the end consumer in america at their full value $5 thereby getting the rest of the profit from the cheap labor . If they could not make these huge profits from China, the Wal marts could increase the squeeze on the Chinese by importing cheap labor sox from say Haiti .
    The third world countries are forced to compete on cheap labor product in a race to the wages bottom .
    The huge profits from cheap labor by Wal mart and others were counted in as part of total American GD'P" !
    Profits from Chinese labor were counted as if it was all the result of American productivity!
    Under the dollar hegemony system in world trade and finance for the last couple of decades military dominant enforcer of the dollar system America, was able run a great Ponzi economy to get countries to exchange their real things for paper dollars.
    These "strong" value dollars gained for exports if kept in China ,may have been inflationary to the internal YUAN currency value set up, creating a demand for higher wages from the Chinese workers. So the capitalists of China ,now organised behind a Communist party front, found it more convenient to provide their own dollars profits back to America as vendor finance ,as investments in Treasury and other bonds like government Fannie Mae bonds Etc.
    The Americans could no longer keep up with the expected returns of interest or dividends in real world comparative value from a bubble economy .
    Foreign money supply /credit began to be withdrawn big time in the crash of 2008 Only the printing press and bailouts ‘profits” keep an unproductive of profit dead economy ticking over.

  2. 5:40

    Do me a favor

    Opt for the kiss principle

    Keep It Simple Stupid


    Bottom Line Up Front


    NO ONE




    Keep it simple man - you'll live longer

  3. lets keep it simple on trust then.

    Do really you hear about anybody saying China cant be trusted in business deals at the level of complaints about america?
    American working people trusted their American capitalists to look after american business and keep the jobs and high wages coming.
    They thought and trusted that flag waving american big business was patriotic .

    Well now,but americas flag waving capitalists trusted the 'communist" chinese to run labor management for them .They are not complaining they made a lot of money by trusting the Chinese to manage cheap labor Chinese.

    They shut down Americas industry ,transferred their factories and a lot of the jobs they owned to china , sending billions of investment money to China and were rewarded a hundred times over .
    But they had betrayed the trust that americans held in big business and americas finance capitalists.

    The trouble is that China found they couldnt trust Ponzi america to keep its word either.
    Their return investments in american bonds, like in Fannie and Freddie bonds , meant they got caught up in the American business culture of free enterprise ponzi fraud and so they had to demand that the America government nationalise these bondsellers so that they could get their promised dividends.

    Trillions of dollars worth of worthless sub prime and other bonds were exported all over the world because other countries were silly enought to beleive americas AAA security rating system was good and could be trusted.

    Then the Chinese found they couldnt trust the value of their dollar savings anyway .Even though the americans had promised to maintain a strong" dollar , the value of the dollar was being steadily inflated away by the US manipulating the value of their own currency.

    Lesson: american banksters and the american government or the strong dollar can not be trusted.
    When the Ponzi economy collapsed, the americans got even worse With Tarp .QE 1 and now QE 2 will be eating away at their savings value invested US Treasuries.
    Bottom line, lesson learned , not just by the chinese but by other countries america should not have been trusted




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