Economy



Introduction

Economyreferstothesumofsocialproductionrelations.Referstothesumofproductionrelationsorsocialeconomicsystemsthatareformedbypeopleintheprocessofmaterialproductionandarecompatiblewithacertainsocialproductiveforce.Itisthefoundationonwhichpolitics,law,philosophy,religion,literature,artandothersuperstructuresarebuilt..

ThemajoreconomiescurrentlyrankedhighintheworldaretheUnitedStates,theEuropeanUnion,China,andJapan.BecauseoftherapideconomicdevelopmentofChinaandothercountries,therankingsamongtheseeconomiesoftenchange.TherankingisalsodeterminedbasedontheactualGDPoftheeconomy.

Wheneconomicproblemsordifficultiesoccurwithinaneconomy,aunifiedmonetaryandfiscalpolicyisoftenadoptedtocopewiththecrisisandtideoverthedifficultiestogether.Forexample,theEuropeanUnion,measuresintheGreekcrisis.

Therelationshipbetweenemergingeconomiesandadvancedeconomies,theevolutionfromG7+1toG20inrecentyearsalsoshowsthecooperationanddialoguebetweenadvancedeconomiesandemergingeconomies,andemergingeconomiesandCooperationbetweendevelopedeconomieswillbefurtherstrengthened,andmutualcoordinationwillbecomesmoother.Therelationshipbetweenthetwowilldeterminethedirectionoftheworldeconomytoalargeextent.Today'sworldishighlyinterdependent,andthedegreeofdependenceisstilldeepening.Theinteractionbetweenemergingeconomiesanddevelopedeconomiesisnotazero-sumgame,butarelationshipof"allprosperitywillberewarded,andeverylosswillcausedamage".

ItwasreportedonAugust17,2011thatChinahassurpassedJapantobecometheworld'ssecondlargesteconomy.

TheInternationalMonetaryFund(IMF)estimatesthatthesizeoftheUSeconomyin2014wasUS$17.4trillion,whileChina’seconomywasUS$17.6trillion.ChinahassurpassedtheUSin2014andbecametheworld’slargestEconomy.

Category

WorldEconomy

TheworldeconomyreferstoanumberofcountriesinordertoachievepreferentialtradepoliciestoachievecommoneconomicbenefitstodealwithfiercemarketcompetitionAndtheeconomiccommunityoreconomiccooperationgroupformed.

Thethreemostwell-knownandlargereconomiesintheworldaretheEuropeanUnion(EU),theAsia-PacificEconomicCooperation(APEC)andtheNorthAmericanFreeTradeArea.

EmergingEconomy

Concept

Inrecentyears,theeconomicdevelopmentofsomecountriesandregionshasadvancedbyleapsandbounds,andthespeedandqualityhavegreatlyexceededthoseofadvancedeconomies.Therefore,theseeconomiesareoftenreferredtoasemergingeconomies.Forexample,amongthefamousfourBRICcountries,China,Brazil,andIndiaareemergingeconomies,whichhavechangedtheworldeconomicstructuretoacertainextent.

Definition

Thereiscurrentlynoprecisedefinitionofemergingeconomies.TheBritish"Economist"dividesemergingeconomiesintotwoechelons:thefirstechelonisChina,Brazil,IndiaandRussia,alsoknownasthe"BRICcountries";thesecondechelonincludesMexico,SouthAfrica,Poland,Turkey,Egypt,etc."NewDiamond"country.AccordingtodatareleasedbytheIMF,in2007,developedeconomiesgrewbyonly2.7%,whileemerginganddevelopingeconomiesgrewby8%.ThetotalGDPofIndia,Russia,andBrazilallexceededthetrillionU.S.dollarmark,andtheywerepromotedtothetop12economiesintheworld.Chinaexceeded2trillionU.S.dollars,rankingfourthintheworld.China,IndiaandRussiacontributemorethanhalfoftheglobaleconomicgrowth.The“newdiamond”countriesalsoperformedwell.GoldmanSachspredictsthatMexico,Indonesia,Turkey,Iran,andVietnamwillbeamongthetop20countriesintheworldeconomyin2025.

Basedontheoutstandingperformanceofemergingeconomies,moreandmorepeoplerealizethatemergingeconomiesarebecoming"thesourceofworldeconomicstability"whenadvancedeconomiesareplaguedbyfinancialcrises.TheIMFpredictsthatdespitetheweakereconomicperformanceofadvancedeconomiesin2008,theworldeconomyisstillexpectedtogrowby4.1%duetothedrivingforceofemergingeconomies.

Strengthperformance

Althoughtheeconomicgrowthofemergingeconomieshassloweddown,accordingtoexpertanalysis,aftertheimpactofthefinancialcrisis,emergingeconomieshaveadjustedtheireconomicstructure,increasedtheirforeignexchangereserves,andimprovedThefinancialsystemhasincreaseditsabilitytowithstandrisks,andtheworldeconomywillcontinuetogrow.

Atthesametime,South-Southcooperationhasalsoreducedthedependenceofemergingeconomiesontheeconomiesofdevelopedcountries.TheformationoftheSouthernCommonMarketandthecooperationbetweenChinaandASEANhavealsoprovidedaguaranteeforthecontinuousgrowthoftheworldeconomy.GoldmanSachsGlobalEconomicResearchDirectorO’Neillhashighhopesforemergingeconomies.HebelievesthatthestrongdomesticdemandofemergingeconomiesisenoughtofullyoffsetthesharpdeclineindomesticconsumerdemandintheUnitedStates.3%to4%growthrate.

OntheeveoftheAsia-EuropeSummit,FrenchPresidentNicolasSarkozymadeastatementinvitingChinaandIndiatoparticipateintheG20summitheldinWashingtononNovember15todiscussfinancialresponses.Thecrisisalsoshowsthatemergingeconomieshavebecomeaforcethatcannotbeignored.

Theeconomicscommunitybelievesthat2010islikelytobeayearofglobaleconomicrecovery,andemergingeconomiessuchasChinaandIndiawillbeattheforefrontofrecovery.Inthelatestreportoneconomicforecastsfor2010,theIMFbelievesthatafterthedevelopedcountriesexperienceda3.4%recessionin2009,theireconomicgrowththisyearwasonly1.3%.Butinsharpcontrastistherapidgrowthofemergingeconomies.Developingcountriesasawholewillreach5.1%in2010,ofwhichIndiawillreach6%andChinawillreach9%.

StandardCharteredBankalsopointedoutthatin2010globaleconomicgrowthisexpectedtoreach2.7%,ofwhichAsianeconomicgrowthwillreach7.0%.Thisonceagainshowsthetrendofglobaleconomicpowerandeconomicbalanceshiftingfromwesttoeast.

Chineseeconomy

InJuly2010,NomuraSecuritieschiefAsiaeconomistRobSubbaramansaidthatJapanwasthedrivingforcefortherestofAsia;Now,thetideisturning,andChinaisbecomingapowerfulforceaffectingotherpartsofAsia,includingJapan.ChinareplacedJapanastheworld'ssecondlargesteconomy.Thisrenaissanceischangingeverything,fromthebalanceofglobalmilitaryandfinancialpowertohowcarsaredesigned.Fromcertainindicators,China’stotaleconomicoutputhasrisentoalevelsecondonlytotheUnitedStates.Becomingthesecondlargesteconomywillhighlightaglorythatthe"CentralKingdom"hasnotenjoyedsinceitlostitsstatusasamilitary,technological,andculturalpowerinAsiainthe18thcentury.

China'sexports,carpurchasesandsteelproductionhaverankedfirstintheworld,anditsglobalinfluenceisincreasingdaybyday.FromtheautomakersinDetroitintheUnitedStatestotheironoreproducersinBrazil,theirwealthdependsonthespendingofChineseconsumersandcompanies.

Theincreaseinwealthalsobringspoliticalinfluence:pressurefromChinahashelpeddevelopingcountrieswingreaterHaveasay.

OnJuly30,2010,YiGang,deputygovernorofthePeople'sBankofChinaanddirectoroftheStateAdministrationofForeignExchange,statedinaninterviewthatChinahassurpassedJapantobecometheworld'ssecondlargesteconomy.ThisisthefirsttimethatChineseofficialshavepointedoutthatChina'seconomyhasbecometheworld'ssecondlargesteconomy.

Atpresent,China’sGDPshouldhavesurpassedthatofJapan.Therefore,thereisnodoubtthatChinahasbecometheworld’ssecondlargesteconomy.Atthebeginningof2010,ChinaannouncedthatitstotalGDPin2009reached4.985trillionUSdollars.Atthattime,themediaofvariouscountriesspeculatedthatChina'sGDPwouldsurpassJapanthisyearandbecometheworld'ssecondeconomy.AlthoughJapanlaterannouncedthatits2009GDPwasUS$5.068trillion,thefigureisslightlyhigherthanthatofChina.Thisyear,China’seconomicdatahasmaintainedagrowthrateofmorethan11%,butJapancanonlysighthatthestrongeconomicgrowthisenoughtosupportChina’sbecomingtheworld’ssecondlargesteconomy.

AccordingtodataonAugust16,2010,Japan’sGDPinthesecondquarterwasUS$1.288trillion,whichwaslowerthanChina’sUS$1.339trillion.Inthepast,ChinasurpassedJapanineconomicoutputinthefourthquarter.That'sbecauseinthelastquarter,seasonalfactorswillmakeChina'seconomymoreactive.Now,asearlyasthesecondquarter,ithassurpassedJapan,makingChina'sannualoutputstrongerthanJapan'sexpectations.

Before2000,Chinawastheseventhlargesteconomyintheworldbasedontheexchangerateatthattime.Before2007,ChinasurpassedGermanytobecomethethirdintheworld.ComparedwithChina'srapideconomicgrowthforsomanyyears,Japan'seconomyhasstagnatedfor20years.Theseatchangeisamatterofcourse.Accordingtothe"WallStreetJournal"report,BruceKasman,chiefeconomistofJPMorganChaseinNewYork,commentedthatChina'ssurpassingofJapanwillbe"amilestoneintheglobaleconomy."Ibelieveothereconomistsandordinarypeoplewillthinkso.

However,China’spercapitaannualoutputislessthanUS$4,000,whichisonlyaboutone-tenthofJapan’spercapitaannualoutput.Comparedwiththeworld'slargesteconomy-theUnitedStates,China'sUS$5trillioneconomyisonlyequivalenttoone-thirdofthelatter'stotaloutput,andthegapisstilllarge.EvenifChinacanmaintainitscurrentgrowthrate,itwilltakeatleast10yearstocatchupwiththeUnitedStates.Chinashouldfocusmoreattentiononhowtoadjustthestructureofeconomicgrowthandhowtofurtherimprovethewelfareofthepeople.

Accordingtothe“2015GlobalInnovationIndex”reportreleasedtodaybytheWorldIntellectualPropertyOrganization,high-incomeeconomiescontinuetooccupyamonopolypositioninthe“MostInnovativeEconomies”ranking,butChina’sStandoutfromtherestoftheeconomy,andgraduallyrankamongtheforefrontofthe"mostinnovativeeconomy".

Thereportpointedoutthatalthoughhigh-incomeeconomiesoccupyamonopolypositiononthisyear’srankings,asamiddle-incomeeconomy,China’sperformanceisanexception.Chinastandsout,ranking29th.China'sinnovationperformanceisveryclosetothatofthetop25high-incomeeconomies,especiallyinareassuchashumancapitaldevelopmentandR&Dinvestment.Intermsofqualityofinnovation,Chinaalsoscoreshigh,andisconstantlypullingawayfromothermiddle-incomeeconomies.

FrancisGurry,DirectorGeneraloftheWorldIntellectualPropertyOrganization,said:“Foreconomiesatallstagesofdevelopment,innovationwillhaveaprofoundandpositiveimpactonstimulatingeconomicgrowth.ButthisprospectItwillnothappenautomatically.Everyeconomymustfindthebestpolicycombinationtomobilizetheinherentinnovationandcreativepotentialintheeconomy."

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