Economy might be twice official size, says analyst
Private sector's hidden wealth 'will stifle efforts to cut growth'
SCMP
2004-05-18
Allen T. Cheng


Outdated methods of compiling economic data have hampered Beijing's efforts to get a true picture of the economy, a regional economist says.
Jim Walker, chief economist for CLSA in Hong Kong, told a forum in Qingdao that the central government's statistical-gathering methods were still based on the centrally planned economy.

"I believe the economy might be twice as large as the official figures," he said.

Officially, the mainland's gross domestic product stands at about US$ 1.4 trillion.

"So much of the private sector doesn't report income to the government for fear of taxes," said Mr Walker, who forecast growth of about 11 per cent this year, far higher than 7 per cent official target.

He said this lack of knowledge about the economy would make it difficult for the government to manage growth. Mr Walker said efforts to cool investment in overheating sectors would be thwarted by the private sector. He predicted cash -rich entrepreneurs would ignore the central government's edict to slow growth and continue to pump money into the economy.

Fresh from a visit to entrepreneur-driven Zhejiang province , Mr Walker said the private sector, which comprises up to half of the nation's economy, would continue to accelerate investments.

"The private sector - which is increasingly the core of China - doesn't care what the government is doing," he said. "Capitalist China is just a few years old. We've got another 20 years of annual nine, 10, or 12 per cent gross domestic product growth in China.

"This is not a bullish forecast. This is just what is going to happen. Whether the central government wants it or not, whether you want it or not, this is just what is going to happen."

Mr Walker said foreign analysts and the media had misinterpreted what Premier Wen Jiabao was saying about overinvestment and overheating.

"For every industry he says we've over-invested in, he's also saying we have another industry that needs your money," he said. "But the really beautiful thing is that the really good companies don't need bank credit. They don't care what the People's Bank of China is doing with interest rates."

http://www.chinastudygroup.org/print.php?type=news&id=5727

China economic will be more then twice and triple.
What is China GNP today?

In Pure GDP term, it is 1.4 trillion USD.
In PPP term, it is 7.1 trillion USD.

Chinese PM just said last year that in 2020 Chinese GDP will be 4 times bigger than now, if Chinese economy keeps growing 7% per year.
7% imo is very conservative, it is not difficult to make 7%.

China's urbanization process in full-scale acceleration

www.chinaview.cn 2004-05-19 00:19:50


BEIJING, May 18 (Xinhuanet) -- With the sustained and steady economic growth in China, China's urbanization has stepped into the stage of full-scale acceleration, said Chinese Vice Minister of Construction Qiu Baoxing here Tuesday.

Qiu told a press conference sponsored by the state council information office that China's urbanization has progressively increased with continuous increase in size and number of cities and towns.

From 1978 to 2002, the level of urbanization in China increased from 17.92 percent to 39.1 percent, with an increase of 21.18 percentage points, said Qiu. The annual growth rate was 0.88 percentage points, two times the world average level of the same period, he added.

Statistics from the Ministry of Construction show that by the end of 2002, there were 660 cities and 20,600 administrative towns in China, totaling a population of 502 million.

Qiu said in the process of urbanization, the planning in the urban and rural areas, serving as a basic means to guide and regulate the urban and rural construction and development, has played an active role in promoting economic and social developmentin the urban and rural areas.

A working mechanism guiding the planning in the urban and ruralareas that fits in the situation of China has taken shape, said Qiu, adding that all the cities, most administrative towns and 70 percent of villages have made revisions of their master plans in succession, which has effectively guided and coordinated various activities concerning land use and development.

But Qiu noted that there are still some problems in the urban and rural planning. One of these problems, a large number of so-called "Image Projects" or "Achievement Projects" that waste man power and money have been undertaken only to promote the image of a city or achievement of city officials.

Other problems include inappropriate acquisition and occupationof land in the form of development zones, overlapped construction in some key infrastructure development projects, and the damage toancient buildings or relics during the construction, said Qiu.

Qiu said, currently, about one-fifth of China's total cities and towns have such problems of inappropriate urban and rural planning, and the Chinese government has decided to take serious measures to solve these problems.

Qiu said the Chinese government started inspection and regulation on national development zones six months ago, and half of China's more than 6,000 development zones scattering across the country have been closed, contributing to the recovery of more than 300 square kilometers of farm land.

The government will continue inspection of the remaining 3,000 development zones, said Qiu, adding that those people and agencies found guilty of illegal behaviors in building development zones will be finally punished.

Qiu said that to solve these problems, the Chinese government will further strengthen the role of urban and rural planning in the economic and social development of the urban and rural areas. And the Ministry of Construction will offer more guidance in the future to the local governments in promoting a coordinated development among all cities and towns.

The Chinese government will also strengthen the supervision andpunishment mechanisms in promoting urban and rural planning, said Qiu, adding that all urban and rural planning made by the local governments should receive the supervision of the public, and any illegal and inappropriate behaviors in the urban and rural construction should be corrected immediately, or will be punished accordingly. Enditem

http://news.xinhuanet.com/english/2004-05/19/content_1477132.htm

I think USA GNP is 11-12 $billions, and USA have ~250 millions people.
Theoretically China GNP potential is $45-50 Billions in 5-6 decades.

It's Trillion, not Billion

And yes, if things go well in China, Chinese GDP may reach 50 trillion after 2050.

But I don't think in 100 years everage Chinese living standard can reach that of USA. The Americans are extremly rich and they also have extrem good potential, big land small population, smart people from all over the world.