Since 1978, the Chinese economy has seen phenomenal growth. ..... the country has grown by relying heavily on investments, exports, and its huge low-cost labor force. That formula has worked well so far, but evidence indicates that China is getting less and less from this approach lately. The country’s export growth is decelerating quickly, and China is already investing an amount equivalent to about half of its GDP—which is probably the highest level ever among any country in peacetime. ...... changing the country’s strategy so that its growth wastes less energy, requires less investment, and is less reliant on exploiting cheap labor as a competitive advantage. .... a transition out of the rapid growth model of the last three decades will be fraught with technical uncertainties and political complexities ..... The factors that drive a country to grow when its GDP per capita is $500 are totally different from the growth drivers when a country has a per capita GDP beyond $5,000. At $500—which was the case in China in 1994—you can copy the technology and production methods of other countries and drop them into your economy. ..... As a country gets richer, its growth formula changes. Innovations, technology, and productivity improvements become more important, as do domestic entrepreneurs and innovators. ...... Professors in China are like company employees, in contrast to their fiercely independent counterparts in the West. Research projects are often directed from the top down rather than being initiated by professors and researchers. Data sharing is difficult across bureaucracies ...... the huge export markets in Europe and the United States—is shrinking on the demand side. ...... technology-based growth drivers require more than simply copying other countries’ technology and business models. They require a rule-based system, IP protection, freedom to think and challenge authority, and a government with limited reach and power. In other words, they require Western institutions.
analysts expect Apple to sell about 8 million iPhone 5 units in the final three months of the year. If the phone sells for around $600, with about $200 of it counted as imported components, then $400 per phone would figure into the government’s measure of gross domestic product...... The new iPhone sales could boost GDP by $3.2 billion in the fourth quarter, or $12.8 billion at an annual rate. That is an increase of 0.33 percentage point in the annualized rate of GDP growth. It could be even higher, he says. Even a third of a percentage point would limit the downside risk to J.P. Morgan’s fourth-quarter growth projection of 2%. ..... forecasts for third-quarter GDP growth to 1.5% and the fourth quarter to 1.4%, both down seven-tenths of a percentage point, largely due to the effect of the drought on farm output. ..... The economy grew at a 2% pace in the first quarter of this year, then slowed to 1.7% in the second quarter. In the final three months of last year, the U.S. economy expanded at a 4.1% pace after a sharp slowdown earlier in the year.
- The tech giant's stock is worth more than the market capitalisations of rivals Google ($196.8bn) and Microsoft ($256.1bn) combined.
- Apple's profits recently passed $1 billion a week and the company now sells a million iPhones a day.
- Apple's stock is worth more than the gross domestic product of Sweden - $458 billion.
- Apple is worth more than all the gold in the American Federal Reserve - $350 billion
- and all the illegal drugs in the world, $321 billion
- sold 37.04million iPhones - its flagship product - and 15.43million iPad tablets, doubling from a year earlier.
- its war chest of cash and securities to almost $100billion - more than enough to plug December's U.S. budget deficit.
- Apple's iPhone business is now bigger than the whole of Microsoft .... The company's smartphone division generated $24.4 billion of revenue in the quarter up until December, whereas the whole of Microsoft generated $20.9 billion in the same quarter.
Clearly Apple is an iPhone, iPad company like Microsoft used to be a Windows, Office company.
Brazil is a modern, world class economy. Most Brazilians work in the service sector. If Brazil is poised to be a world power, it is to be on the strength of its economy, not the might of its military.
Image via WikipediaI have not followed the Fed's corner of the house as closely as the president's corner, but I get the impression the Fed put a trillion into real estate already and is about to put another trillion into it. This sounds like madness.
The wise guys on Wall Street cooked up nefarious schemes that inflated real estate prices, created a bubble, brought the economy down, and now the Fed is supposed to keep those artificially inflated prices propped up?
Why? Because a broken political system will not allow the president to instead pump a trillion into the 2010 version of the New Deal, but it will allow the unelected Fed chair to play around with a trillion dollars?
Many have speculated this is the Roman empire collapsing. Those who the gods seek to destroy, they first make them mad.
I am for a second stimulus bill of perhaps a trillion poured into drastic job creation.
And all the work of creating the global institutions for the next phase of globalization is yet to be done. There can be no real recovery without that.
Those who say this is like the Great Depression are right. Where they get it wrong is when they don't face the fact that now the entire world is a stage. It is one world. The reason people acted surprised when the bottom fell out was because they had their US goggles on. Put on world goggles. Then you can see.
Can a democracy make its people lose weight? That is the challenge. Instead the democracy continues to gorge on French fries and tea parties. Some hard choices are going to have to be made.
BusinessWeek
Germany At 20: Special Report Germany's Growth: New Rules, Old Companies: As most developed nations stumble in the race against emerging nations, here's how Germany has succeeded in keeping skilled labor working in good jobs....($3.23 trillion) gross domestic product .... , labor market measures begun in 2003 under Chancellor Gerhard Schröder made it easier to hire and fire workers, and Germany's Mittelstand have proved nimble competitors ...... German labor unions gave up wage increases in return for job security. ..... The Mittelstand companies, which typically employ fewer than 500 workers, comprise more than 70 percent of German workers and contribute roughly half of the country's GDP. The Mittelstand also embodies the German approach to business practice—paternalistic, consensual, conservative, and arguably more effective over the long haul than what Germans sometimes dismiss as American-style cowboy capitalism...... Mittelstand companies have emerged as successful models in an era of globalization—agile creatures darting between the legs of the multinational monsters..... Rather than firing workers, companies reduced hours, saving almost half a million jobs. ..... a system of worktime accounts that enabled employees to work fewer hours without a reduction in pay, in exchange for promising to work more hours without a salary increase when business picks up..... By May of this year, unemployment in Germany was at 7 percent, a 17-year low..... they prefer bank loans to selling bonds or issuing stock ..... it was wage restraint over the last 10 years that's responsible for Germany's success
Goldman Sachs Says U.S. Economy May Be ‘Fairly Bad’: “A fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.” ...... The Fed bought $1.7 trillion worth of Treasury and mortgage debt in a program that ended in March. The purchases helped push mortgage rates to historic lows. ... Bernanke said Oct. 4 that restarting large- scale asset purchases would probably spur growth
China Hardens Opposition Over Yuan Gains, Tells EU to Back Off: “Europe shouldn’t join the choir” ..... If we increase the yuan by 20-40 percent as some people are calling for, many of our factories will shut down and society will be in turmoil.” ..... Brazilian Finance Minister Guido Mantega warned of a global “currency war.”
India Can Help Obama Reach Export Goal: The last time U.S. exports doubled in five years was 1981-1986, when Ronald Reagan was President—and Japan, not China, was the economy Americans feared most. ..... China, India, Brazil, Canada, and Mexico. ..... the Indian economy is the world's fourth-wealthiest—based on purchasing power parity—after the U.S., Japan, and China. ....... the country will keep growing at close to 10 percent in the next decade ..... "Do you have a favorable or unfavorable view of the U.S.?" Some 76 percent of Indian citizens responded affirmatively. ..... Americans are better-liked in India than almost anywhere else in the world ........ Today the U.S. is the world's breadbasket. In India you will find Washington State apples as well as California almonds and pistachios ..... India now hopes for a trillion-dollar upgrade of roads, bridges, power plants, harbors and more. .... Carter was the last President to travel to India within two years of taking office
Volcker Says Nations May Face Prolonged Unemployment: the U.S. and other developed nations face the prospect of protracted joblessness. ..... “This has not been an ordinary recession,” Volcker, 83, said today in a speech in Toronto. It’s “very difficult to find a sector in the American economy that has any spark to it” ..... the Chinese are stuck with dollars and we’re stuck with indebtedness.”
I mean I was born in India. This pertains to me. People who live on a dollar a day are people in my personal circle. I know quite a few of them: some of them have nicknames for me, from my homevillage.
BusinessWeek has come up with a fabulous story cluster around the big topics of the economic resurgence of the two Asian giants. But perspective has to be maintained. Look at the per capita income. The PPP (Purchasing Power Parity) for 2004 for China is $5,600. For India it is $3,100. Fro Nepal it is $1,500. I had to throw Nepal in because, well, I grew up in Nepal.
My point being it will be a while before India and China jump over to the $50,000 range.
But the GDP figures, adjusted for Purchasing Power Parity, are US $11.75 trillion, China $7.262 trillion and India $3.319 trillion. At that level the differences are less stark.
The 19th century was Britain's, the 20th was America's, this one is Asia's. Cisco's Scheinman: "We came to India for the costs, we stayed for the quality, and we're now investing for the innovation."
Africa could compete. Both India and China are living testimonies to economic unions and free trade. A China that were 20 different countries would be less efficient. Africa could compete by becoming a single economic unit, a single market. Snuff out civil wars, introduces democracies, and work towards becoming a single market. The recipe is no rocket science.