Date of this Version
August 18, 2010 in The China Beat http://www.thechinabeat.org/
This week came the not-unexpected news that China has passed Japan to become the world’s second-largest economy. Here, we’ve rounded up reactions to and analyses of the story:
• At his New Yorker blog, Evan Osnos asks “Why the Long Face?”, explaining that “While the story has rated front-page treatment in the U.S., it has sent China into a frenzy of self-flagellation, in the hope of reminding people that it is still home to a lot of very poor people.”
• Yoree Koh at the Wall Street Journal reports that Japan is taking the news of its third-place status with a shrug:
“It can’t be helped,” said Koichi Matsubara, 36, who works in real estate. “Business has been drifting overseas, our population is shrinking. We’re a small island, and given the size of our country, we were perhaps at the top longer than expected. I think we will continue to lose ground.”
• A few observers, however, are asking if China can maintain its sustained economic growth for much longer. Citing China’s heavy reliance on export-oriented development, as well as the country’s relatively low level of domestic consumption, some economists are instead looking to India to become Asia’s next hot economy, as James Fontanella-Khan of the Financial Times explains. Why?
First of all, unlike China, India isn’t rapidly getting older. In fact, its ratio of working-age people to dependents (children and the elderly) is actually improving.
Second — India’s government reforms, and its growing infrastructure spending, have helped create jobs, and dynamic labour market, and a vibrant private sector.
Finally, globalisation has helped India tap into both the goods export market, but more importantly, the global services exports market — which India now has a 2.6 per cent share of.