Archive for November, 2009
China’s Economy is Growing Much Faster than Japan’s
The chart below shows the comparison of economic growth between China and Japan since 1980:
Source: Euromonitor
Japan’s GDP gre faster from 1980 thru 1900 and then rose slowly from early 90s thru 1998. However since 1980 China’s GDP is growing at a higher rate consistently year after year. Between 2000 and last year China’s economic growth easily beat Japan’s growth. However the GDP per capita is still much higher for Japan than China. China’s GDP per capita has come a long way since the 80s to reach over $5,000.
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China’s Aged Population is Rising
China’s total population is 1.3 billion as of July last year. The one-child policy has reduced the population growth but China’s population is ageing rapidly. By 2020, the proportion of people aged 65+ is projected to rise to 13.1% of population. In 1978 it was just 4.5% and last year it stood at 9.4%. By 2020, the aged population will account for almost 1/4th of the global aged population.
China’s Population Shift from 1978 to 2008 in Millions
People aged 65+ is growing in Asia. Japan has the most most aged people in the world with 22.7% of the total population in 2009.
Aged Population in the Asia-Pacific
Source: Euromonitor
What is the effect of ageing population in China?
Older people tend to get sick often. Hence there is an increase in consumer spending on health care expenditures which includes both state health care expenditures and private spending. For example in China, health care expenditures grew from $45.9 B in 2003 to $123.0B in 2008.
Western companies that sell health-care equipments and technology to China offer good investment opportunities.
Top 10 Export Markets and Import Sources of China
China is increasingly looking to emerging markets for economic growth opportunities. As the countries in the West stagnate emerging markets in Asia, Africa and Latin America have become more strategically important for China.
In 2008, China’s import sources were mostly from Asia. The Top 10 Import Sources for China in 2008 are listed below:
From Jan thru October last year, the top five import sources were Japan, EU, ASEAN, Korea and Taiwan. USA came in at number 6. Japan is the largest import source country for China.
The Top 10 Export Markets in 2008 were:
Source: MINISTRY OF COMMERCE, PRC
The EU, USA, Hong Kong, ASEAN and Japan were the five largest export destinations for Japanese goods. The US and EU accounted for about 40% of Chinese exports market.
OPEC’s Share of World Crude Oil Reserves
The OPEC’s Share of World Crude Oil Reserves at the 2008 is shown in the chart below:
Saudi Arabia, Venezuela and Iran are the countries with the largest proven oil reserves and account for over 50% of the total reserves.
Government Debt and Interest Costs are Very Low in Denmark
The government debt and interest costs are very low in Denmark. After reaching a peak in 1996 the debt has continued to decline year after year as th chart shows below:
Source: National Bank, Denmark
“Recent years have witnessed a significant reduction of the central-government debt, from DKK 600 billion in 1997 to DKK 195 billion in 2008, corresponding to a decline from 53 per cent of GDP to 11 per cent of GDP”. This is very good since in many of the industrialized countries such as the US, UK, France, Spain, etc. government debt has been rising for many years now.
Incidentally Denmark now has the lowest unemployment rate in the EU at just 4.10%. In the US, unemployment rate has reached 1o.2% which is more than double that of Denmark’s.
As the total government debt has fallen over the years interest payments on debt has also decreased as shown below.”On account of the pronounced debt reduction since 1997 and lower market interest rates, the central government’s interest costs have declined from DKK 43.5 billion to DKK 11.6 billion over the same period, equivalent to a fall from 3.9 to 0.7 per cent of GDP”
Comparatively the US spends about 6% of GDP on interest payments alone each year.
The Largest Trade Partners of Japan 2008
The Largest Trade Partners of Japan in 2008 are listed below:
Source: WSJ
China is the largest trade partner of Japan followed by the US and South Korea. Other than the US and Germany, the rest of the top 10 countries that trade with Japan are in Asia. This underscores the importance of the Asian markets for Japanese companies.
