“Times, they are a chang’n.” Reading the business news, China is projected to surpass the US probably. For certain, “India surpasses Japan in terms of PPP.” It all depends upon which method is used for calculation. The fact is that economies are growing among the world leading nations. Here is a list of what that means:
- That means consumption is up.
- It means competition for scarce resources is up.
- It means that the struggle to sustain economies is fierce.
- It means that developing nations and people who are mislocated may be on the losing end of the economic spectrum.
See the annotated list items below.
"India now world's 3rd largest economy, behind just US, China
FE Online | New Delhi | Updated: Apr 30 2014, 17:40 IST
India beats Japan to become world's third largest economy in terms of purchasing power partiy (PPP).
World Bank: India 'went from 10th largest economy in 2005 to 3rd largest in 2011'
India is now the world's third largest economy in terms of purchasing power parity, ahead of Japan and behind the US and China which hold the top two spots. This was revealed by the 2011 round of the World Bank's International Comparison Program (ICP) released on Tuesday.
"The United States remained the world’s largest economy, but it was closely followed by China when measured using PPPs. India was now the world’s third largest economy, moving ahead of Japan," the report said.
It highlighted the fact that the largest economies were not the richest, as shown in the ranking of GDP per capita. The middle-income economies with large economies also had large populations, setting the stage for continued growth, it added.
The report says India "went from the 10th largest economy in 2005 to the third largest in 2011.
“Gather 'round people
Wherever you roam
And admit that the waters
Around you have grown
And accept it that soon
You'll be drenched to the bone
If your time to you
Is worth savin'
Then you better start swimmin'
Or you'll sink like a stone
For the times they are a-changin'”
“China’s Economy Surpassing U.S.? Well, Yes and No
By TOM WRIGHT
There are a number of reports around Wednesday (here and here) that China’s economy, by one measure at least, is likely to surpass the U.S. in size sometime this year.
The headlines will surprise many people, used to hearing China’s economy will overtake the U.S. sometime in the 2020s, or even later.
On Wednesday, the International Comparison Program, a statistical project coordinated by the World Bank, announced new data on the size of economies by purchasing power parity that suggests China’s economy is bigger than previously thought.
But the latest news is anything but surprising.
Regular GDP power rankings are compiled by converting a country’s gross domestic product into U.S. dollars at market exchange rates. The U.S.’s economy in 2012 was valued at over $16 trillion, twice the size of China’s, according to World Bank statistics. It’s by these measures that China’s economy won’t overtake the U.S. for a decade or more.”
1. That means consumption is up.
GDP and energy consumption in Japan, 1958–2000 The data shows the correlation between GDP and energy use; however, it also shows that this link can be broken. After the oil shocks of 1973 and 1979 the energy use stagnated while Japan's GDP continued to grow, after 1985, under the influence of the then much cheaper oil, energy use resumed its historical relation to GDP.
The energy consumption growth in the G20 slowed down to 2% in 2011, after the strong increase of 2010. The economic crisis is largely responsible for this slow growth. For several years now, the world energy demand is characterized by the bullish Chinese and Indian markets, while developed countries struggle with stagnant economies, high oil prices, resulting in stable or decreasing energy consumption.
According to IEA data from 1990 to 2008, the average energy use per person increased 10% while world population increased 27%. Regional energy use also grew from 1990 to 2008: the Middle East increased by 170%, China by 146%, India by 91%, Africa by 70%, Latin America by 66%, the USA by 20%, the EU-27 block by 7%, and world overall grew by 39%.”
2. It means competition for scarce resources is up.
“Fracking Fuels Water Fights In Nation's Dry Spots
By: Garance Burke
Published: June 16, 2013
A stock pond south of Dallas, TX, dries up due to drought.
SAN FRANCISCO -- The latest domestic energy boom is sweeping through some of the nation's driest pockets, drawing millions of gallons of water to unlock oil and gas reserves from beneath the Earth's surface.
Hydraulic fracturing, or the drilling technique commonly known as fracking, has been used for decades to blast huge volumes of water, fine sand and chemicals into the ground to crack open valuable shale formations.
But now, as energy companies vie to exploit vast reserves west of the Mississippi, fracking's new frontier is expanding to the same lands where crops have shriveled and waterways have dried up due to severe drought.
In Arkansas, Colorado, New Mexico, Oklahoma, Texas, Utah and Wyoming, the vast majority of the counties where fracking is occurring are also suffering from drought, according to an Associated Press analysis of industry-compiled fracking data and the U.S. Department of Agriculture's official drought designations.”
3. It means that the struggle to sustain economies is fierce.
“All forms of capitalism are transitional” says Kenneth Rogoff, professor at Harvard University, and former chief economist at the IMF.
“Is modern capitalism sustainable?
Is there a viable option besides capitalism for today's world? Or is it possible to adjust the system to make it work?
Last Modified: 06 Dec 2011 09:55
Cambridge, United Kingdom - I am often asked if the recent global financial crisis marks the beginning of the end of modern capitalism. It is a curious question, because it seems to presume that there is a viable replacement waiting in the wings. The truth of the matter is that, for now at least, the only serious alternatives to today's dominant Anglo-American paradigm are other forms of capitalism.
Continental European capitalism, which combines generous health and social benefits with reasonable working hours, long vacation periods, early retirement and relatively equal income distributions, would seem to have everything to recommend it - except sustainability. China's Darwinian capitalism, with its fierce competition among export firms, a weak social safety net, and widespread government intervention, is widely touted as the inevitable heir to Western capitalism, if only because of China's huge size and consistent outsize growth rate. Yet China's economic system is continually evolving.
Indeed, it is far from clear how far China's political, economic and financial structures will continue to transform themselves, and whether China will eventually morph into capitalism's new exemplar. In any case, China is still encumbered by the usual social, economic and financial vulnerabilities of a rapidly growing lower-income country.
Perhaps the real point is that, in the broad sweep of history, all current forms of capitalism are ultimately transitional. Modern-day capitalism has had an extraordinary run since the start of the Industrial Revolution two centuries ago, lifting billions of ordinary people out of abject poverty. Marxism and heavy-handed socialism have disastrous records by comparison. But, as industrialisation and technological progress spread to Asia (and now to Africa), someday the struggle for subsistence will no longer be a primary imperative, and contemporary capitalism's numerous flaws may loom larger.”
4. It means that developing nations and people who are mislocated may be on the losing end of the economic spectrum.
“Why worry now if even the Great Financial Crisis of 2008 didn’t result in a de-globalisation of economic activity and financial markets? Well, neither did the Panic of 1907 on Wall Street, which preceded the final hurrah of the Golden Age of globalisation and paved the way for the creation of the Federal Reserve in, yes, 1913. Following the 2008 crisis, central banks and governments around the world opened the floodgates to prevent a depression (and rightly so) and fuelled a powerful rebound in economic growth, global trade, asset markets and capital flows. Yet, one unintended consequence of QE and ZIRP was a rush of liquidity into emerging markets, which offered a seemingly successful growth model and thus higher expected returns.
Five years on, the EM growth model looks severely challenged, as Manoj Pradhan and I already pointed out more than a year ago. Many companies in the old industrialised countries are repatriating production that they sent offshore during the globalisation frenzy, and investors who burned their fingers in the quest for higher returns in EM are reconsidering their decision to globalise their portfolios. A localisation or renationalisation of investment has already taken place in euro area financial markets in response to the euro area debt crisis. Could we now see a similar move globally? I hope not, but I wouldn’t rule it out.
Needless to say, a de-globalisation of economic activity and financial markets would have dire economic consequences for the global economy and markets overall, but would also redistribute wealth and create a lot of losers and winners, in my view.”