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26 Ways in which China Has Surpassed America

Based on the list published by Michael Snyder we publish the 26 other ways in which Chinas has surpassed the US:

 

In terms of purchasing power, China now has the largest economy on the entire planet, but that is not the only area where China has surpassed the United States.  China also accounts for more total global trade than the U.S. does, China consumes more energy than the U.S. does, and China now manufactures more goods than the U.S. does.

In terms of raw GDP, the U.S. is still number one, at least for now.  But according to the IMF, China is now the number one economy on the entire planet in terms of purchasing power…

The simple logic is that prices aren’t the same in each country: A shirt will cost you less in Shanghai than San Francisco, so it’s not entirely reasonable to compare countries without taking this into account. Though a typical person in China earns a lot less than the typical person in the US, simply converting a Chinese salary into dollars underestimates how much purchasing power that individual, and therefore that country, might have. The Economist’s Big Mac Index is a great example of these disparities.

So the IMF measures both GDP in market exchange terms, and in terms of purchasing power. On the purchasing power basis, China is overtaking the US right about now and becoming the world’s biggest economy.

The following are 26 other ways that China has surpassed America…

#1 When you add up all imports and exports, China now accounts for more total global trade than the United States does.

#2 There is now more total corporate debt in China than there is in the United States.

#3 During 2013, the US sold about 121 billion dollars worth of stuff to the Chinese, but they sold about 440 billion dollars worth of stuff to the US.  That was the largest trade deficit that one nation has had with another nation in the history of the world.

#4 China is now the leading manufacturer of goods in the entire world.

#5 Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exportsare more than twice the size of U.S. high-tech exports.

#6 The United States had been the leading consumer of energy in the world for about 100 years, but during the summer of 2010 China took over the number one spot.

#7 China now has the largest new car market in the entire world.

#8 China has more foreign currency reserves than anyone else on the planet.

#9 China is the number one gold producer in the world.

#10 China is also the number one gold importer in the world.

#11 15 years ago, China was 14th in the world in published scientific research articles.  But now, China is expected to pass the United States and become number one very shortly.

#12 China is also expected to soon become the global leader in patent filings.

#13 China awards more doctoral degrees in engineering each year than the United States does.

#14 China has the world’s fastest train and the world’s most extensive high-speed rail network.

#15 China uses more cement than the rest of the world combined.

#16 Today, China produces nearly twice as much beer as the United States does.

#17 85 percent of all artificial Christmas trees are made in China.

#18 There are more pigs in China than in the next 43 pork producing nationscombined.

#19 China is now the number one producer of wind and solar power on the entire globe.

#20 China produces more than twice as much cotton as the United States does.

#21 China produces more than three times as much coal as the United States does.

#22 China now produces 11 times as much steel as the United States does.

#23 China controls over 90 percent of the total global supply of rare earth elements.

#24 An investigation by the U.S. Senate Committee on Armed Services foundmore than one million counterfeit Chinese parts in the Department of Defense supply chain.

#25 According to author Clyde Prestowitz, China’s number one export to the U.S.is computer equipment.  According to an article in U.S. News & World Report, the number one U.S. export to China is “scrap and trash”.

#26 Nobel economist Robert W. Fogel of the University of Chicago is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040 if current trends continue.

Source: http://endoftheamericandream.com/archives/not-just-the-largest-economy-here-are-26-other-ways-china-has-surpassed-america?utm_source=feedly&utm_reader=feedly&utm_medium=rss&utm_campaign=not-just-the-largest-economy-here-are-26-other-ways-china-has-surpassed-america

Published by: Michael Snyder

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The Pacific Age

WILLIAM HENRY SEWARD was no misty-eyed dreamer. It was whaling, or what he eulogised as “the chase of the whale over his broad range of the universal ocean”, that first drew his attention to the Pacific. He was a visionary, though. The man who became Abraham Lincoln’s secretary of state in 1861 and bought Alaska from tsarist Russia in 1867 knew what America had to do to take advantage of the opening of the Pacific. It needed to build on the Gold Rush spirit in California; finish a transcontinental railway to carry people and freight from one side of America to the other; dig a waterway through Central America for ships to pass through; and acquire Pacific territories like Hawaii and Midway as maritime hubs of trade and security. All this was done either within his lifetime or within a few decades of it.

He was also itching to wield America’s nascent power and saw the Pacific as the place to do it. In a speech to Congress in 1852 he predicted that the Europe-centred Atlantic would decline in importance “while the Pacific Ocean, its shores, its islands and the vast regions beyond, will become the chief theatre of events in the world’s great hereafter”. Commerce, he added, would be the “great agent of this movement” and would flourish between America and China.

The Pacific evokes that kind of enthusiams. It is a 64m square mile (165m square km) blank on the map (except for a plethora of small islands), bigger than the world’s entire landmass. Still, at times it seemed as though its destiny would never arrive. The refrain, “The Mediterranean is the ocean of the past, the Atlantic is the ocean of the present and the Pacific is the ocean of the future,” first heard more than 100 years ago, is still repeated today. Yet exactly half a century after Japan “rejoined the world” (in the phrase of Ian Buruma, a writer) by hosting the Olympics in 1964, the Pacific Age has now clearly arrived. Japan’s economic power may have peaked 25 years ago, but it produced a trans-Pacific competition that now has America and China vying with each other for the title of the world’s largest economy (at purchasing-power parity). All three Pacific nations trade vigorously with one another.

At the same time trade has surged into the farthest reaches of the Pacific (see charts). Since the 1970s trade across the Pacific has far outrun the Atlantic sort. China, for instance, has taken its hunger for high-protein food and raw materials to Latin America and become the biggest trading partner of distant Chile. By one estimate, in 2010 it promised more loans to Latin America than the World Bank, the Inter-American Development Bank and the United States Export-Import Bank combined.

Such connections have made the developing rim of the Pacific a growth factory. Whereas the United States’ economy grew by an average of 1.6% a year over the past decade and the European Union’s by 1.7%, Latin America’s expanded by 4.6%, East Asia by 5.4% and South-East Asia by 5.9%. The 21 economies of the largest trans-Pacific grouping, Asia-Pacific Economic Co-operation (APEC), account for nearly half of global trade. “The region comprises not only the world’s ‘factory floor’ but also its most important sources of services, technology and investment, and final-goods markets,” writes Peter Petri, an international-trade economist.

It has also seen an astounding increase in prosperity. In poorer parts of Asia the size of the middle classes—those living on $2-$20 a day—has increased sevenfold since the turn of the millennium. In Latin America it has doubled. Parts of Malaysia have become so bourgeois that taxi drivers moonlight as salesmen of smart apartments overlooking the Strait of Malacca, one of the world’s busiest trade routes.

Both America and China know how important it is to keep this economic engine running, so in public they generally use moderate language about each other. In 2011 Hillary Clinton, then America’s secretary of state, explained President Barack Obama’s “pivot” to Asia in an article in Foreign Policy: “We all know that fears and misconceptions linger on both sides of the Pacific. Some in our country see China’s progress as a threat to the United States; some in China worry that America seeks to constrain China’s growth. We reject both those views.” China’s president, Xi Jinping, at a meeting with Mr Obama in California last year, responded in kind: “The vast Pacific Ocean has enough space for the two large countries of China and the United States.”

Choppy waters

Yet just when the Pacific Age should be celebrating its half-century, the region is showing signs of strain, from increased rivalry between the superpowers and emerging nationalism in Japan, China and elsewhere to sudden squalls in places like Hong Kong, Thailand and, as ever, North Korea. “The shifting landscape in the Asia-Pacific and associated risks are about as challenging as they’ve been since APEC was established in 1989,” says Alan Bollard, the organisation’s executive director.

There are complex counter-currents. Many East Asian countries worry that America’s commitment to the region could be put at risk by more immediate threats in the Middle East and Ukraine. At the same time they do not want America to provoke China by becoming too involved. The rhetoric has recently been turned up. Chuck Hagel, America’s defence secretary, wagged a finger at China when he told a gathering of military chiefs at the Shangri-La dialogue in Singapore in May: “One of the most critical tests facing the region is whether nations will choose to resolve disputes through diplomacy and well-established international rules and norms or through intimidation and coercion. Nowhere is this more evident than in the South China Sea.” In his own speech a day later, Lieutenant-General Wang Guanzhong, head of the Chinese delegation, retorted: “Assertiveness has come from the joint actions of the United States and Japan, not China.”

Recently the tensions have spread to the economic sphere, too. China has interrupted investment and trade with neighbours who stand up to its territorial assertiveness, such as Japan, the Philippines and Vietnam. China and America each have their own plans for turning the Pacific into a giant free-trade area that both see as a test of their influence in the region—and in the wider world. The Obama administration says it wants to forge a trade pact with the world’s most sophisticated rules in the Pacific: the Trans-Pacific Partnership. It characterises China as wanting to perpetuate a model of state capitalism.

Fred Bergsten of the Peterson Institute for International Economics in Washington describes the overlapping commercial and strategic concerns as a juggling tournament. “We’re in the middle of an historic transformation of the economic architecture of the whole Pacific region. There are competing models and high politics. It’s a very complex set of balls in the air,” he says.

Pacific history—an underdeveloped field of study compared with that of the Atlantic, as its scholars dolefully note—is awash with big-power rivalries (see next article). For centuries European powers were carving it into monopolistic trading enclaves that they defended ruthlessly. The only free-traders were pirates. The risks of history repeating itself are palpable.

Many argue that the ocean’s most vulnerable spot is its lack of robust institutions to ensure fair play. They point to the Atlantic Charter, forged in 1941 in the heat of war by Winston Churchill and Franklin Roosevelt, that laid down rules to prevent territorial aggression, reduce trade restrictions and ensure freedom of the seas. All of these are live issues in the western Pacific today.

Mr Bergsten says the “obvious cultural affinities” across the Atlantic that produced the charter, and institutions such as NATO, are “of a different order” from those across the Pacific, or even within East Asia. “Having a beach on the Pacific does not make you a member of a community,” snorts Robert Manning of the Atlantic Council, a Washington think-tank. Some say that the only shared ideology in East Asia is nationalism and a sense of historical grievance against each other.

Four reasons for optimism

East Asia, like America, is a place where power is judged first and foremost by wealth. “In East Asia, with the exception of North Korea, growth far more than any abstract political theory is the primary means by which governments legitimate their rule,” says Bilahari Kausikan, Singapore’s ambassador-at-large. “This does not guarantee peace. But East Asian governments at least have a strong self-interest to minimise actions that would disrupt growth.”

Besides growth, the promise of the Pacific rests on three other fairly sturdy legs: trade, ideas and connectivity. Trade is part of the Pacific’s DNA. While values and ideals travelled across the Atlantic with the Pilgrim Fathers, goods were flowing across the Pacific: silver, silk, porcelain, spices, sandalwood, much of it beautifully crafted in China. Today much of the traffic is in silicon.

Trade moves with the times. Japan’s elegant “flying geese” model (with Japan leading industrialisation in Asia and the rest following in V-formation) brought manufacturing to the “miracle” economies of South-East Asia in the 1990s and even survived the abrupt intrusion of the Chinese dragon in the 2000s. But no one can glide complacently. America is becoming more competitive, thanks to fracking, its energy revolution of the past half-decade; so some Asian economies are likely to become more closely connected to and more dependent on it.

With trade come ideas. Kishore Mahbubani, a Singaporean writer, puts free-market economics at the head of a list of “seven pillars of wisdom” that Asia has imported from the West, along with science and technology, meritocracy, pragmatism, peace, rule of law and education. At the same time Pacific Latin American countries are looking to East Asia for economic models.

Even China’s “state capitalism” may be exaggerated. In a new book, “Markets over Mao”, Nicholas Lardy, an American economist, crunches the numbers to argue that the secret of China’s success is private business, not the state-owned giants. Private firms have become “the major source of economic growth, the sole source of job creation and the major contributor to China’s still-growing role as a global trader”, he writes.

Smaller countries around the Pacific, such as the Association of South-East Asian Nations (ASEAN), band together for strength in numbers against the big powers. There is a constant flow of people, across the Pacific to Silicon Valley and back again; and there are pop-culture excursions between three countries, China, Japan and South Korea, that are otherwise staunchly nationalist. The Pacific is where the 21st century’s habit of networking is most advanced. From Silicon Valley to Shanghai, the world’s biggest internet firms have flourished. Nirvikar Singh, co-editor of “The Oxford Handbook of the Economics of the Pacific Rim”, published earlier this year, says the ocean is becoming the world’s “digital playground”.

To be a playground rather than a battleground, however, it needs rules that govern trade and the sea routes across which commerce flows. Since the second world war these rules have been underpinned by an American security presence that has helped keep the peace in the Pacific—give or take self-inflicted wounds, such as the Vietnam war. Yet America is not the only arbiter. APEC’s Mr Bollard says the region has benefited from a set of “loose-tight” standards of behaviour—guidelines rather than hard-and-fast rules—that have helped the region muddle through Vietnam, the spread of communism, China’s cultural revolution and other periods of severe instability. A rising China, too, wants a say in setting the rules, especially in its own neighbourhood. Getting all sides to agree on what those rules should be is the challenge for the next half-century of the Pacific Age.

Excerpt from an special report from: The Economist

Published: November 13 2014

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An “A to Z” guide fot the APEC meeting 2014 in Beijing

apec2014-graphicTo help people better understand the focus of the APEC Beijing meeting, Xinhua News Agency has prepared a list of 26 key words that define the gathering of the leaders of Asia-Pacific economies.

APEC

Born in 1989, the Asia-Pacific Economic Cooperation connects both sides of the Pacific Ocean, linking emerging economies with developed economies. APEC has made the geographical concept of “Asia-Pacific” into an economic cooperation group that accounts for half of the world’s economy. It currently demonstrates the biggest growth vigor and potential.

Bogor Goals

APEC members announced the Bogor Goals in 1994, proposing the goal of forming a “big family” of APEC members. They promised to achieve free and open trade and investment in the Asia-Pacific region no later than 2020. As it is the 20th anniversary of the Bogor Goals, people expect the APEC Beijing meeting to provide a clearer path for regional economic integration.

Connectivity

The APEC Beijing meeting will discuss ways to strengthen comprehensive infrastructure construction that can improve regional connections. APEC members are actively discussing an APEC connectivity blueprint that involves the connection of infrastructure, rules and people.

Dialogue

Dialogues play an important role at the Beijing APEC meeting. On Nov. 8, Chinese President Xi Jinping chaired and addressed a dialogue on strengthening connectivity partnership. On Nov. 10, Xi will chair the APEC Business Advisory Council Dialogue with Leaders and answer questions at the meeting.

Economies

The 21 APEC economies make up 40 percent of global population, 57 percent of the world’s GDP, and 46 percent of the global trade.

Free Trade Area of Asia-Pacific

Promoting regional economic integration is a major topic of the APEC Beijing meeting. The meeting is expected to make new progress in starting building the Free Trade Area of the Asia-Pacific (FTAAP).

Growth

All APEC economies need to drive growth through innovation and reforms. Growth is one of main topics of the APEC Beijing meeting. APEC members will discuss key fields such as economic reforms, innovation and urbanization. They will explore new momentum for regional growth.

Host

China is the host of the annual APEC meeting for a second time in 13 years after the 2001 APEC Shanghai meeting. China hopes the Beijing meeting will deepen Asia-Pacific economic cooperation and shape the region’s future through closer partnership.

Integration

In promoting the FTAAP, China hopes APEC can guide and coordinate regional economic integration. China also hopes APEC can chart a roadmap for the FTAAP.

Japan

Chinese foreign minister and commerce minister met with their Japanese counterparts at the APEC Beijing meeting. China also calls on the Japanese side to create an “enabling environment” for the contact of the leaders of the two countries.

Key Meetings

The meetings held in Beijing between Nov. 5 and Nov. 11 are the key for this year’s APEC activities. The meetings include minister-level meetings, leaders’ informal meetings, a dialogue on strengthening connectivity partnership, APEC CEO Summit, and APEC Business Advisory Council Dialogue with Leaders.

Leaders

The leaders and representatives of the APEC member economies will get together in Beijing to attend the APEC Economic Leaders’ Meeting and to carry out intensive bilateral and multilateral diplomatic activities.Chinese President Xi Jinping will have a group photo taken with the leaders and representatives attending the APEC meeting. Xi will also take part in a tree planting activity that symbolizes the joint growth, development and progress of the Asia-Pacific.

Made-in-China

The APEC Beijing meeting will be adorned by products made in China, such as clothes, food and cars. For example, Hongqi limousine H7, the first domestic made high-end car, has been designated the official vehicle during the APEC meeting.

Non-binding Principle

APEC serves as a negotiation platform following a non-binding principle. APEC not only heralds the regional trade liberalization but also drivesWTO to break new grounds.

Obama

At the invitation of Chinese President Xi Jinping, U.S. President Barack Obama will pay a state visit to China and attend the 22nd APEC Economic Leaders’ Meeting from Nov. 10 to 12.

Partnership

This year’s APEC meeting is under the theme “Shaping the Future Through Asia-Pacific Partnership,” underlining the aspiration that inclusive partnerships may be the greatest common ground APEC members can find.Analysts said the meeting will help pave the way for APEC members to bring relationships away from a zero-sum relation so that they can focus on promoting sustainable development.

QE

The U.S. Federal Reserve has decided to end its quantitative easing (QE) stimulus while Japan’s central bank unleashed an expansion of its already massive monetary easing program. The European Central Bank has also signaled plans to introduce QE to counter deflation and boost growth. How will APEC members brace for the possibly volatile capital flows ahead?

Relations

A new model for relations between major countries, including bilateral and multilateral relations. The APEC meeting is an important scene on the global diplomatic stage.

Spouse

Leaders’ spouses will also attend the APEC meeting. Although details of their activities have not been released, the spouses are certain to get public attention.

Transformation

All APEC members need to transform growth methods, adjust structures, stabilize economy and promote reforms. During the Beijing meeting, members will conduct in-depth discussion on an array of issues such as economic reform, innovative growth and urbanization. The members will also deepen cooperation on frontier areas such as Internet and marine industries.

Urbanization

China advocates cooperation of urbanization at APEC. Urbanization will be an important engine driving the future prosperity of Asia-Pacific.

Value Chain

About 10 to 15 countries are involved in making a mobile phone. The formation of global value chain is an important sign that trade and industrial cooperation among member economies has reached a new height. The global value chain also provides new momentum for in-depth development of free trade and investment.

World Attention

More than 4,000 journalists have gathered in Beijing to cover the APEC meeting. The world expects the meeting to achieve tangible progress in advancing regional economic integration. The world also hopes the Asia-Pacific region to continue driving the global economic recovery. China is expected to make new contributions to reviving the Asia-Pacific region.

Xi Jinping

Chinese President Xi Jinping will chair and participate in a series of important meetings, including addressing the APEC CEO Summit, chairing the APEC Business Advisory Council Dialogue with Leaders and chairing the Economic Leaders’ Meeting.

Yanqi Lake

The APEC Economic Leaders’ Meeting will be held near Yanqi Lake, 50 kilometers north of Beijing’s downtown area. On the Yanqi Island, a conference center, hotel, exhibition center and VIP villas all use green technologies. Altogether 3,000 bird nests have been built for bird migrations.

Zero Tariff

One day there may be no tariff between APEC economies with the development of the free trade area and regional connectivity. If that comes true, people may pay the same amount of money to buy an iPhone in Shanghai as they do in California.

Source: Xinhua

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Should China reduce its foreign reserves?

Before the Global Financial Crisis (GFC) China ran large trade surpluses and faced pressure to let the renminbi (RMB) appreciate. Having abandoned the peg to the U.S. dollar in 2005, the RMB has appreciated by 36% on a real effective basis.

Until 2009 China ran surpluses in both of its major customs regimes: processing trade and ordinary trade. Processed exports are final goods (such as tablet computers) that are produced using parts and components (such as microprocessors) that come primarily from east Asia. Ordinary exports are goods such as clothing and toys that are produced primarily using Chinese factors.  Since the GFC, China’s surplus in ordinary trade has disappeared while its surplus in processing trade has soared (see Figure 1).

Figure 1. China’s ordinary, processing, and total trade balances

Source: China customs statistics.

One possible explanation for these divergent responses is that the RMB appreciation since 2005 has affected the price competitiveness of ordinary exports more than the price competitiveness of processed exports. For ordinary exports, most of the value added is produced in China, while for processed exports, much of the value added comes from imported parts and components. Cheung et al. (2012) – using dynamic ordinary least squares (DOLS) estimation and quarterly data over the 1994-2010 period – find statistically significant price elasticities for China’s ordinary exports. They report that a 10% RMB appreciation would reduce ordinary exports by between 13% and 19%. Their findings imply that the RMB appreciation since 2005 has reduced steady state ordinary exports by 50% or more. On the other hand, processed exports are produced within global value chains. It is thus necessary – as Bayoumi et al. (2013) highlight – to take account of foreign value added when calculating the response of exports to exchange rates.

New evidence on exports

In Thorbecke (2014) I present data on value-added exchange rates for processed exports, and investigate their impact on trade. I conduct two types of tests over the 1993-2013 period.

  • First I employ panel DOLS estimation with value-added exchange rates across the supply chain relative to individual countries importing processed exports.
  • Second, I use Johansen maximum likelihood techniques with value-added real effective exchange rates and aggregate data on processed exports.

The first model employs annual data and the second model uses quarterly data. With these two very different data sets and methodologies, the results in every specification indicate that there is a strong and statistically significant relationship between exchange rates throughout the supply chain and processed exports. The findings from the panel data estimation imply that a 10% appreciation across the supply chain would reduce processed exports by between 13% and 19%. The findings from the time series estimation indicate that a 10% appreciation would reduce processed exports by between 22% and 29%.

While the RMB has appreciated by 36% since 2005, exchange rates in supply chain countries have depreciated.  This is clear in Figures 2 and 3. Figure 2 presents data from the panel estimation and Figure 3 from the time series estimation. Figures 2 and 3 use very different data sets, but tell a similar story. According to the measure in Figure 2, although the RMB has appreciated by 45% between 2005 and 2013, the value-added exchange rate for processed exports (the integrated exchange rate) has only appreciated by 7%. The reason for this is that weighted exchange rates in supply chain countries have depreciated. Figure 3 shows that although the RMB has appreciated by 36% on a real effective basis between 2005Q1 and 2013Q4, the integrated real effective exchange rate has only appreciated by 14%. The reason for this is that, according to this measure also, exchange rates in key supply chain countries have depreciated. Thus China’s surplus in processing trade has soared partly because depreciations in supply chain countries have offset the appreciation of the RMB.

Figure 2. Weighted averages of the bilateral integrated exchange rate, the bilateral exchange rate in supply-chain countries, and the bilateral RMB exchange rate with 24 importing countries

Source: The CEPII-CHELEM database, China Customs Statistics, and calculations by the author. Note: Weights are determined by the share of processed exports going to each of the 24 countries.

Figure 3. The integrated real effective exchange rate (IREER), the RMB REER, and the weighted REER in supply-chain countries

Source: The Bank for International Settlements, China Customs Statistics, the International Monetary Fund International Financial Statistics, and calculations by the author.

The two largest suppliers of parts and components to China – Taiwan and South Korea – ran global current account surpluses between 2005 and 2013 that averaged almost 9% and almost 3% of gross domestic product , respectively. Nevertheless, Taiwan’s real effective exchange rate depreciated during these nine years and Korea’s real effective exchange rate appreciated by less than 5%. Taiwan, Korea, and China accumulated foreign exchange reserves to slow exchange rate appreciations. For instance, China’s external reserves increased by $508 billion in 2013 and by $125 billion in the first quarter of 2014 (Troutman 2014).

Many Asian economists argue that further reserve accumulation is not beneficial for the region. Yu (2014) observes that resources are misallocated when central banks sterilise the impact of reserve accumulation on domestic liquidity, because small and medium-sized enterprises are denied access to funds. Yoshitomi (2007, p. 32) notes that “the same income that is being salted away in the form of dollar reserves could instead be used to underwrite investments in housing, water supply, roads, and infrastructure generally, not to mention education and health care for Asian populations.”  Fang et al. (2012) find that an additional year of education in China produced returns of 20% per year, far exceeding the return available from U.S. dollar reserves.

Conclusion

If central banks in east Asian surplus economies together reduced their rates of reserve accumulation and gave greater play to market forces, the surpluses that they run in processing trade and in their overall current account balances would generate pressure for a concerted appreciation of East Asian currencies against importers’ currencies. The evidence reported here indicates that such an appreciation would help to rebalance processing trade.

A joint appreciation would increase the purchasing power of Asian citizens and allow them to import more medicines, foods, and other goods from the rest of the world.  It would also have an attenuated effect on export competition between East Asian economies in third countries because their currencies would be appreciating together. Finally, it would help to maintain intra-regional exchange rate stability and thus facilitate the flow of parts and components within production networks (see Tang 2014).

Source: World Economic Forum Blog

Author: Willem Thorbecke is a Senior Fellow at Japan’s Research Institute of Economy, Trade, and Industry.

Image: Chinese 100 yuan banknotes are seen in this picture illustration taken in Beijing July 11, 2013. REUTERS/Jason Lee 

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China, October HSBC PMI highlights

HSBC published yesterday the new PMI review for the Chinese Economy, here we point the main highlights of the report.

Chinese manufacturers again signalled only a fractional improvement in overall operating conditions in October.

Outputs and new business both expanded at the lowest rates in five months, while new export order growth weakened form September’s recent peak to a modest pace.

Average inputs cost and prices changed both declined at the fastest rates since March.

After adjusting the seasonal factors the HSBC PMI located at 50.4, this was slightly up from the 50.2 of September, which points that the manufacturing continued to increase in October, albeit at the weakest rate in the last five months.

Purchasing activity increased across China’s manufacturing sector in October, as has been the case since May.

Average Cost burdens declined at the quickest rate since March in October, amid reports of lower prices for raw materials.

Prices charged by Manufacturing companies also declined markedly in October, which was partly attributed to attempt to gain new business.

china pmi oct final

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