Comparing China with the Rest of the World

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Comparing China with the Rest of the World

  1. 1. Presentation for The Hong Kong Association of New York Comparing China’s Economy with the Rest of the World Ted Naganawa US-China Strategist, TedStrategy.com President, Ted Naganawa LLC Visiting Scholar, Fudan University October 2008
  2. 2. Introduction <ul><li>Many Americans make an analogy between China and the United States </li></ul><ul><li>Some similarities, but also critical differences </li></ul><ul><li>Which countries might be better substitutes for the US? </li></ul>
  3. 3. Introduction <ul><li>China and India - Effects of demographics </li></ul><ul><li>China and Japan – Currency appreciation and asset bubble </li></ul><ul><li>How about Hong Kong? </li></ul>
  4. 4. Comparing China’s Economy with the Rest of the World I. China v. the US Similarities and Dissimilarities
  5. 5. I. China v. the US Similarities and Dissimilarities <ul><li>Similarity 1 – Geographic </li></ul><ul><li>Total area (9.6 million sq km) </li></ul><ul><li>Capital (39 °55'N v. 38 °53'N ) </li></ul><ul><li>Multiple centers (Shanghai v. New York) </li></ul>
  6. 6. I. China v. the US Similarities and Dissimilarities
  7. 7. I. China v. the US Similarities and Dissimilarities
  8. 8. I. China v. the US Similarities and Dissimilarities
  9. 9. I. China v. the US Similarities and Dissimilarities
  10. 10. I. China v. the US Similarities and Dissimilarities
  11. 11. I. China v. the US Similarities and Dissimilarities
  12. 12. I. China v. the US Similarities and Dissimilarities
  13. 13. I. China v. the US Similarities and Dissimilarities
  14. 14. Comparing China’s Economy with the Rest of the World II. China v. India Effect of Demographics
  15. 15. II. China v. India Effect of Demographics <ul><li>Population growth can be a positive factor in economic growth </li></ul><ul><li>But not always, especially before a country reaches a certain level of industrialization </li></ul><ul><li>Positive and negative effects of demographics on the economic growth of China and India </li></ul>
  16. 16. II. China v. India Effect of Demographics
  17. 17. II. China v. India Effect of Demographics
  18. 18. II. China v. India Effect of Demographics
  19. 19. II. China v. India Effect of Demographics
  20. 20. II. China v. India Effect of Demographics
  21. 21. II. China v. India Effect of Demographics
  22. 22. II. China v. India Effect of Demographics
  23. 23. II. China v. India Effect of Demographics
  24. 24. II. China v. India Effect of Demographics
  25. 25. II. China v. India Effect of Demographics
  26. 26. II. China v. India Effect of Demographics
  27. 27. II. China v. India Effect of Demographics
  28. 28. II. China v. India Effect of Demographics
  29. 29. II. China v. India Effect of Demographics
  30. 30. II. China v. India Effect of Demographics
  31. 31. II. China v. India Effect of Demographics
  32. 32. II. China v. India Effect of Demographics <ul><li>Conclusion - China </li></ul><ul><li>A high proportion of urban population helps economic growth beyond 2010 </li></ul><ul><li>An aging population looms as a dark cloud hanging over future growth </li></ul>
  33. 33. II. China v. India Effect of Demographics <ul><li>Conclusion - India </li></ul><ul><li>A more moderate rise in urban and working-age population subdues growth </li></ul><ul><li>A lower proportion of urban population works negative for an aging population </li></ul><ul><li>Relatively poor states of overall education and healthcare </li></ul>
  34. 34. Comparing China’s Economy with the Rest of the World III. China v. Japan Trade Surplus, Currency Pressure, and Bubble?
  35. 35. III. China v. Japan Trade Surplus, Currency, and Bubble? <ul><li>Today’s China is facing basically the same problem as Japan did in the 1980s </li></ul><ul><li>The two countries’ large trade surplus has led to pressure from the US government </li></ul><ul><li>The impact the currency appreciation has had on the creation of a bubble after 1985 and 2005 </li></ul>
  36. 36. III. China v. Japan Trade Surplus, Currency, and Bubble?
  37. 37. III. China v. Japan Trade Surplus, Currency, and Bubble?
  38. 38. III. China v. Japan Trade Surplus, Currency, and Bubble?
  39. 39. III. China v. Japan Trade Surplus, Currency, and Bubble?
  40. 40. III. China v. Japan Trade Surplus, Currency, and Bubble?
  41. 41. III. China v. Japan Trade Surplus, Currency, and Bubble?
  42. 42. III. China v. Japan Trade Surplus, Currency, and Bubble?
  43. 43. III. China v. Japan Trade Surplus, Currency, and Bubble?
  44. 44. III. China v. Japan Trade Surplus, Currency, and Bubble?
  45. 45. III. China v. Japan Trade Surplus, Currency, and Bubble?
  46. 46. III. China v. Japan Trade Surplus, Currency, and Bubble?
  47. 47. III. China v. Japan Trade Surplus, Currency, and Bubble?
  48. 48. III. China v. Japan Trade Surplus, Currency, and Bubble? <ul><li>Conclusion – Good News </li></ul><ul><li>What we saw in the last couple of years was probably a mini-bubble </li></ul><ul><li>Domestic hype has not ended and will be able to revive asset markets </li></ul><ul><li>As long as the global economy holds and money keeps coming in from overseas </li></ul>
  49. 49. III. China v. Japan Trade Surplus, Currency, and Bubble? <ul><li>Conclusion – Bad News </li></ul><ul><li>Further appreciation of the renminbi will reduce China’s exports and trade surplus </li></ul><ul><li>It attracts more speculative money from overseas, creating a bigger bubble </li></ul><ul><li>More speculative money or further export growth, which one creates a bigger bubble? </li></ul>
  50. 50. Comparing China’s Economy with the Rest of the World
  51. 51. Comparing China’s Economy with the Rest of the World
  52. 52. Comparing China’s Economy with the Rest of the World
  53. 53. Comparing China’s Economy with the Rest of the World
  54. 54. Comparing China’s Economy with the Rest of the World
  55. 55. Comparing China’s Economy with the Rest of the World
  56. 56. Comparing China’s Economy with the Rest of the World

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