Cause and effect of Chinese GDP & ecnomic growth Worldwide.

Re: In 1840, CHina has the highest GDP in the world but.....

Overall the strategy of car makers in whether to be inside China or India or any other nations depended in many factor.

If you have noted, the joint venture of any foreign owned car company like Honda, Toyota, Volkswagon, etc in china are basically just building cars for the domestic usage. And the market sector was pretty much saturated. Also I believe that there is a control whether not all car company could just enter China without a partner in China to build cars.

As for others, India had a good infrastructure and supporting industries for independent car company, however domestic demands for the cars built by these companies are actually not as large and most of these cars are for export purposes.

As to companies building their vehicles in Thailand and Indonesia, well they are using the tax incentives and concessions that they receive when the built vehicles are sold within South East Asia in the ASEAN countries, which by no means is also a big market.

So as you can see, the need of building the car industries in which countries are actually determined by many factors and not just the development of that country (only I don't deny that one of the factors is the industrialization of that particular country too).

Re: In 1840, CHina has the highest GDP in the world but.....

Recently, China to introduce new measures, in accordance with vehicle emissions,a substantial increase in the motor vehicle tax, that means levy tax depend on the car engine, if the car engine larger, it will pay more tax.
this will affect the foreign cars sold in the Chinese market,because the design of foreign cars is not only for the Chinese market, they are not easy to do and improve,in particular, to change the engine.
but the Chinese-made cars easier to improve because they are primarily for the Chinese market.
this measure is aimed at environmental protection, not against foreign brand automobiles.from what I have seen in China,there are so many foreign-brand cars driving in China, China already had formed a middle class, wealthy entrepreneurs, government unit,domestic and foreign large companies special-purpose vehicles, and so on. they are the buyers of foreign brand cars,although the new measures affect them, but they will still buy foreign brand automobiles.

Re: In 1840, CHina has the highest GDP in the world but.....

Actually I do not believe that the new measure that are introduced by the CHinese government would have too much of an effect on the foreign cars company in their decision to penetrate the Chinese market. There will be some effect, but really not that massive.

Afterall, most of the foreign cars that we see in Chinese streets nowaday are joint venture with chinese partners. They build cars for the chinese roads and these cars are not exported out of China.

Many countries, especially European countries had been introducing lots of measures to prevent or at least minimise pollution to their street... such as the Euro 5, Euro 6 standard for the diesel engines. So I would believe their cars are quite clean.

The main reason for new companies such as Ford and Chrysler not wanting to go into CHina was as the same reason that I have pointed out before.

1) They do not want joint venture.
2) The automobile market in china is quite saturated now with many foreign joint venture companies like Volkswagon, Honda, Toyota, Peugeot, etc. And massive amount of domestic companies like Chery, Dongfeng, Hafei, BYD, etc.
3) And I believe building cars for export in China is no longer a very lucrative business because China is no longer as cheap as she used to be.
4) India, Mexico and South Africa might provide cheaper alternatives to build lower to mid end cars.
5) Taking advantage of the free trade, or tax incentive system when building cars in Thailand and Indonesia and selling these cars to ASEAN countries.

Re: In 1840, CHina has the highest GDP in the world but.....

Its rather interesting to note with all this talk about China surplanting America as the worlds foremost economic power, how resilient Americas share of world GDP has been.and is actually slightly higher in 2009 (26.7%) then it was in 1975 (26.3%)..

Source :

Re: In 1840, CHina has the highest GDP in the world but.....

bladerunner said:

Its rather interesting to note with all this talk about China surplanting America as the worlds foremost economic power, how resilient Americas share of world GDP has been.and is actually slightly higher in 2009 (26.7%) then it was in 1975 (26.3%)..

Source :

Please, Log in or Register to view URLs content!

Click to expand...

You do know that in 1990, the USSR fell, right?

Re: In 1840, CHina has the highest GDP in the world but.....

bladerunner said:

Its rather interesting to note with all this talk about China surplanting America as the worlds foremost economic power, how resilient Americas share of world GDP has been.and is actually slightly higher in 2009 (26.7%) then it was in 1975 (26.3%)..

Source :

Please, Log in or Register to view URLs content!

Click to expand...

All the while the world's GDP double in size. Well for some people it easier to be in denial

Re: In 1840, CHina has the highest GDP in the world but.....

At present moment, China is ranked number 3 in the world and is going up the ladder if nothing went wrong. The key words here is "IF NOTHING WENT WRONG." Well, there are plenty of factors that could affect the result. Only time will tell if all the implementation from the Chinese government work.

Right now, we are seeing that the result so far is quite positive in all areas. But as mentioned before, there are factors that could tilt the end result... and pretty fast. The key thing now is to prevent overheating of China's economy.

I believe there are proper methods being implemented so far and China's currency is controlled by the government - so is their financial sector such as the banking industries, thus I think it is pretty save to say that China had most if not all the steps in place.

In saying that, we will now look at US's economic, although seeing that the financial crisis hit US pretty badly, but we are not seeing the country collapsing. The US government could still pump in trillions into her market to ensure that the financial sector (backbones of US) do not collapse, which actually give us the basic idea that US is not as weak as we imagine... also a review by Obama's administration and his government's strategy in pumping in money to help manufacturing companies thus providing job security, I am seeing and is confident that the income deficit will decrease (at least till 2018 when the baby boomers started to decrease and retired.).

I can say that for China to overtake US... it will not be a very quick process and in actual fact, not very easy to achieve.

But come to think of it... do we really want China to overtake US, and to what purpose it would do?

Re: In 1840, CHina has the highest GDP in the world but.....

Hendrik_2000 said:

All the while the world's GDP double in size.

Click to expand...

So what? China's under the Qing more than Halved in 50yrs: Yes China was exposed to outside forces of a negative nature, but the Usa during the last 50yrs had 4 wars 3 mini recessions pluss this most recent one, as well as being expected to play the role of the worlds policemaan during those yrs.
USA still contributed 26% of the Worlds GDP in 2009. the point is its still top dog despite all the economic crises its faced over the last 50yrs.

So maybe the USA did do something right, resulting in things that China can ponder over.

Click to expand...

Re: In 1840, CHina has the highest GDP in the world but.....

solarz said:

You do know that in 1990, the USSR fell, right?

Click to expand...

This graph seems to show China's gain was at the expense of the EU. and "Others" which i guess includes the USSR.

Re: In 1840, CHina has the highest GDP in the world but.....

Looking at world GDP shares for different nations around the world is not a good indication of a country's capability and strenght (economically), but it is a good indication of the position of the country at present moment and as compare to where she is in the past. However for a country like China, her past few hundred years are all not very good indication of her present position due to many facts, one of them was her history (late Qing era), which actually is not very glamourous, also her more recent civil war and stuff like that.

If we are to judge China, we should start by the New China era which was from 1949 onward.

But as I say, all these are just a projection on historical data. What we are more interested now, is the breakdown of the country's GDP. Only by looking at these incomes could we actually know more accurately and predict her future standing. Because we could not just look at GDP of a nation as a whole, there are different sectors, some sectors might be declining and no longer useful, while other are in greater demand. By simply looking at GDP standing in the world, is also not a good indication on the strenght of the country. It is a good indication of where the country is now, not might not be the same in the future.

Thus, I would tend only to look at the standing and take it as a rough reference, then look into individual country's income and how they derived or project their income received, before trying to predict if they are going to stand at that position.

Also please note that individual country having already been at the position is not going to be derail that easily especially when we are looking at more than 10% of difference. When we look into world economy, we should be focusing not one 1 year or two down into future, but at area of something like 10 to 20 years down the road.