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Conceptual Background of the People's Republic of China (PRC)
China's economic expansion "represents one of the most sustained and rapid economic transformations seen in the world economy in the past 50 years"... Economic growth has averaged 9.5 percent over the past two decades... With nearly 20 percent of the world's population, with greater international investment than any other country, with GDP growth in the past year of more than 9 percent and with determined plans to expand upon that success in the future, China has attained an economic prominence no one could have foreseen... China in Next Few Decades In 2003, Goldman Sachs attempted to project which countries had the potential to become the world's largest economies over the next fifty years. In 2005 the world's economic system is preeminently dominated by the United States, with a GDP of $11.7 trillion. The other trillionaire countries in existence today are Japan ($4.4 trillion), Germany ($2.0 trillion), China ($2.0 trillion), Britain ($1.7 trillion), France ($1.5 trillion) and Italy ($1.2 trillion). Within five years, China overtakes Germany, to become the third largest economy behind the United States and Japan. This is in spite of China's growth beginning to slow from the breakneck double digit rates of the 1990s to around 7% in 2010, and later to around 5% at the end of the following decade. China's economy slowly cools, but Japan's economy is stone cold in comparison, with a real growth rate of barely a percentage point per year in the coming decade. In 2016, China passes the $5 trillion barrier and overtakes Japan to become number two in the world. The Smart Money Says...In November, The Fidelity Investor claimed you can still profit from "China's surging economic growth" and you can "do it in the safest market in the world, the U.S." At the same time last month, the Wall Street Journal quoted, expanded, and endorsed Beijing Merchant Bank, China Renaissance Haiwen's recommendation that smaller companies (deals) are the way to go for foreign investors in China. The Economic Case for China Investment Generally Chinese currency revaluation will bring a potential 10-40% investment return in the future for China business investment on currency values alone. Leading "analysts estimate the yuan is undervalued by anywhere from 10 to 40 percent against the U.S. dollar". The big news today is that the exchange rate between dollar and Yuan is around 1:8 compared to 1 : 8.28 earlier this year, an increase of some 3.5%. Copyright © 2007 Greater China Acquisition Corp., All rights reserved. |