Now that China has surpassed Japan to become the world's second-largest economy, economists predict it's on track to replace the US as the world's biggest by 2025. But what does the higher rank really mean for the average Chinese citizen?
There is no doubt China has achieved impressive growth over the past decade. But even though the country has averaged about 10% growth over the past several years, that doesn't mean the average Chinese citizen is necessarily eating or sleeping better than the average German or Frenchman. In fact, with GDP per capita at $3,744 in 2009, China placed #86 out of 164 countries ranked according to 2009 World Bank data. This was just below much smaller economies such as Tunisia, Albania and Jordan.
While Japan might have lost its place to China, the average citizen there is still generally much richer. In 2009, Japan's GDP per capita, at $39,727, ranked it 19. What's more, even while the size of the U.S. economy ranks just one notch above China's, it's nevertheless one of the richest countries in the world with GDP per capita in 2009 at $45,989. In 2010, Japan's GDP per capita rose to $42,500 while in the U.S. it rose to $47,100.
Even while China's population is still poor relative to most developed countries, many of its citizens must be feeling flush with wealth. Its GDP per capita surged from just $3,744 in 2009 to $4,300 in 2010, according to the CIA Factbook, a 15% jump.
There is little doubt that China's economy will eventually surpass the U.S., mostly because of its sheer size -- its population is 1.3 billion, versus just 300 million in the U.S. Starting in 2000, China's economy began its aggressive climb through the top ten economies, surpassing many of the world's most advanced economies. In 2000, it bumped Italy to become the sixth-biggest economy in the world. Five years later, China unseated France, rising its way to be the fifth-largest economy. Then in 2006, it trumped the United Kingdom, then Germany the next year.
China stayed in third place for the next three years until 2010. It was the year when Japan's economy – hampered by weak demand and a rapidly aging population – contracted by 0.3% during the fourth quarter, marking the first time in five quarters that its economy has ever contracted.
More from Fortune's Asia Business Report:
Wow. I thought it would only take 2-3 years could overcome all of those stagnant European economies.
Many of post here offers false information. Many of you guys have no idea about China. Arrogance and ignorance hurts us. My company has office in China. We have a factory in Wen Zhou. China's minimum wage is about 250 US dollar per month. If you put standard living into consideration: buying power of 1 Chinese yuan = 1 us dollar. That means the minimum wage of Chinese gives them about equivalent buying power of $1625 / month salary in US. That is about $10 per hour which is very close to US minimum wage. We can't illegally hire people with less pay since we are foreign companies. We pay factory workers with minimum wage and we have to pay college new grad about 3K Chinese yuan per month. That is equivalent $3000 buying power of an US citizen per month. What I try to say is China is not using Slave labors. You have to consider cost of living in China. I can also say all workers in US mid states are slave labors if I judge them with California wages. China is rising for sure. Understanding China is very important in order for us to come up with correct strategy to deal with the rising super power. Arrogance and ignorance gets us no where. Now, we are surprised that our jobs going overseas and if we still live in our yesterday's glory, we will be second class citizens soon. When China's GDP per capital pass France, China will rule the work. Just multiply that number with China's population. Go figure. We shouldn't sit and look at statistic figures which please us. Reality/truth hurts.
Here goes bogus statistics by bogus statisticians and commentators. Per capita GDP is more useless than nothing; it's hogwash! Take away the super rich, and normalize for purchasing power parity. Then, let's compare per capita earnings, as well as the distribution of earnings. The picture looks very different. Of course, that does not suit the purposes of the propagandists who constitute CNN. Keeping one's head buried, like an ostrich, only hurts that one in denial, nobody else.
So, the chart has shown that per capita income in china has grown from about $1,000 to $4,300 in 10 years.
In the same amount of time, US per capita has grown from $35,000 to $47,100...
$3,300 vs. $12,100.
Sure, more than half of the Chinese are still poor. But if you just combine the population of Beijing, Shanghai, Guangzhou, Tianjing. You will get about 100 million. Those cities alone can make up the purchasing power that is similar to countries such as Japan and Germany...
People have to realize that China is nothing to make anyone envious. They do not have the Microsoft, Boeing, Toyota, GM, Sony, and Intel/AMD of the world. The masters of the world are exploiting China's cheap slave labor. China's role in the world economy is provider of cheap slave labor. That is why China has the worst wealth distribution of all developing and industrial nation and most of the 1+ billion people are making less than $1 per day. Companies I mentioned are the ones making real profit and taking them to their respective countries. Only small profit was left to Chinese people and the government so the dictators can stay in power and people would not revolt. Once you realize that, you know China will not take over the 21st century and replacing United States as the #1 super power like some people were dreaming.
back to the horse and buggy....
What is needed is a balance of workers rights, decent wages and the right to collective bargaining which are guaranteed by the government as a counterweight to the greed of unfettered corporate driven capitalism. We seem to be tilting in the opposite direction, where government is controlled by the very greedy interests it is supposed to regulate. Unregulated capitalism is an ugly thing, many people suffer and die in the name of corporate avarice. Corporate financial and insurance interests are responsible for the economic catastrophe of 2008. Corporate multinational interests are responsible for the export of American jobs. In both cases corporations lobbied government successfully to increase profits at the expense of Americas citizens, by deregulating CDO trading,and pushing "free" trade to eliminate the protection of American workers with punitive tariffs for unfair trading by China and India. Corporations are NOT patriotic. They are only interested in maximizing compensation for their management, and to a lesser extent profit for the shareholders. They have no place in government, which is for the benefit of the citizens, not the corporations.
Hate to bust the Union-lover's bubble, but about 90% of all US workers do not belong to a Union. Not sure how some believe that all of us are in a union with collective bargaining. I seem to do very well for myself and I have no desire to be in a union. The only time I would is if it is forced on me and then again I may decide against that.
So what is your plan Walter? Is it to turn over control of all things to the government? Have you seen the way they run their alphabet soup organizations? Please come back with some common sense and also please give all the readers out there an example of where communism or socialism solved the problems you speak of.
Do you not support freedom? and what does freedom mean to you? Sorry I think our human rights trump all your emotions and greedy wants. I believe we are free to create companies that succeed and fail on their merits of what products they make and if they can sell. Not sure you noticed but corporations go belly up all the time, so forcing things on people has and will never work.
No other nation has been able to reproduce the success the U.S. has and sure its not perfect, but when I huge section of our population fails to educate themselves they will fail in this society, unless of course you would like to go back to horse and buggy?
I remember when they asked Nixon what he was going to do about "red" China. I think he said he would put it on a purple table cloth.
suffer massively under state control:
That phrase says it all, we are on the verge of suffering massively, when the state is controlled by the greedy interests of corporate america. When the state IS the corporations, you will have China, and their version of "success". A captive population of slaves with no collective bargaining, little adaquete food and housing except for a tiny elite class, and crushed rebellions.
if one keeps aside their ultranational tendencies, their literacy level, the scientific and industrial capacity, average health of citzens, the maund in dollars of foreign exchange, had improved beyond recognition. the upward curve of China had started from the Nixons visit to that country and provision of 'the most favoured nation" in trade and commerce. In addition the USA had supported the Taiwan, South Korea, Honkong and Singapore in trade and commerce as well as in education,defense, and cultural affairs. those countries provided the additional nucleus for the rapid developement.
the USA has a role and can be proud of that if they can forget their present temporary difficulties.
The English gave us, the Indians, the common official and academic link language that unites as a nation where 14 major languages are spoken in addition to several minor languages and dialects, ethnicities besides castes, and religions.
That Carter supported the Islamic fundamentalists to drive out the marxist Russian influence in Afghanistan and the quagmire has not ended.
sometimes we do not know what our action will lead into.
Walter, Lincoln DE wrote:
Wake up America and vote the greedy GOP out of office.
Sure, lets all jump out of the frying pan and into the fire!
We need to get rid of most of the socialist spending policies which are created by politicians. Not just Republicans, but mostly Democrats. If you haven't figured this out yet, you are insane. Look up the definition of insane if you don't understand.
Simply voting out the politicians is pointless unless you understand what needs to replace them.
China is basically running legalized slavery. Its role in the global community is providing slave labor. China may have surpassed Japan as 2nd largest world economy, but it has the worst wealth distribution of all developing country. Even $4500 GDP per capita does not tell the whole story. Over half of Chinese population makes under $1 per day. The real boss is the United States and others that are telling China what to make. Do you really think Americans cannot make iPods? Just not at the price China is offering because of its cheap labor. But who makes the most money? It's the Intel, Apple, Sony, Nike, Mattel that are making the money with cheap toys and shoes and high tech. China only gets a tiny piece of the pie and most goes to the few individual Chinese who become filthy rich. China needs to keep its currency devalued so it has clear labor cost advantage so the government can keep its population employed. Otherwise, the dictators could not stay in power. China is not a country that will replace United States as super power.
So here we have an article explaining the difference between GDP and GDP per capita. I had to check the banner at the top to make sure I wasn't reading USA Today.
Russia's GDP per person is similar to China's. My takeaway: stay away from Socialistic policies if you want a vibrant economy, the farther the better. Socialism: the bottom 1/10 does about like under Capitalism but everybody else does much worse economically.
Wow, looks like this article really sparked a nerve with some emotional people. Yeah seems to you all that greed and the GOP have caused all the problems. Ever think to look at the stats and see that the great "social" programs that were kicked off 35+ years ago have caused most of the decay in our standard of living and helping those out of poverty. I hate to throw around facts, but really go take a look at China and you will see that the communist led state is causing most of these problems you describe about America. If only government would get out of the way and stop being a leech, many could get jobs and support themselves and their families.
I know it makes you feel good to be so one sided and blame the GOP or corporations, but I know plenty of people that make really good livings working for big corporations. Unions are good in theory, but when they start becoming just like the uber-rich with their corruptions and ridiculous requests they are no better than the communist or those that like slave labor.
I think we all should look in a mirror and ask ourselves are we hipocrits and are we all exactly the same? Capitalism is not perfect, but there is no other system that can create the wealth and jobs like it does. I rather suffer a little for freedom than suffer massively under state control.
Good points re growth, but like in the USA, WHAT does it REALLY mean, for the people? More oligarchs! More arrogance, and heavy handed abuse, for the Glory of Getting RICH! More obscene pollution, and worse, the wholesale contamination of the food and water supply.More demand for exotic remedies, to insure far more species are EXTERMINATED, for ever.
Sure, China is FREE from FOREIGN domination for the 1st time in 350 years...but just like here in the USA, it is the ROTTEN corruption WITHIN, that causes decay and the guaranteed FALL. At least with the Chinese, one might say, they have too many poor and uneducated....WHAT IS OUR EXCUSE, people of America?
China is the model which the corporate republican-led state and federal governments have for America. A huge non unionized workforce working for slave wage, while the uber-rich get richer with government tax breaks. Wake up America and vote the greedy GOP out of office.
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