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China Economic Growth: Reclaiming Its 200 year old Crown
Pinnacle Digest writes: China is not a newly emerging economy which has never known world economic superpower status. In the 1600s, 1700s and even as late as the 1800s, China was, without question, the world's largest economy. What's amazing is not the fact that China is on a boomerang course to reclaim its spot at the top of the world economy, but the speed at which it is accomplishing it.
From 1978 it took China 9 years to double its GDP. It went on to double its GDP again 9 years after 1996. This is a record among nations as far as history is concerned. It took the US 47 years to double its GDP from 1839. The closest comparison to China would be South Korea, which took 11 years to double its GDP from 1966.
In 1972, bilateral trade between the U.S. and China was less than $100 million. Today trade is more than $1 billion per day, with 800,000 U.S. jobs dependent on exports of goods and services to China. This economic growth has fueled improved trade relations between the US and China.
Holmes and his team cite many reasons for China's continued parabolic, yet sustained rise in GDP. The China Investment Corp., China's largest sovereign wealth fund, believes China's most important aspect, which allows it to grow at these astounding rates, is that the country has strong leadership. This is unlike Europe, which is lacking a true leader and is a place where monetary policy is hijacked by fiscal policy, which is then hijacked by the social welfare system.
China's continued ambitions for growth are outlined as a member from Holmes' team recently travelled to the J.P. Morgan China Conference in Beijing.
As most of us know, a strong China is a strong commodities market. This is why our team at Pinnacle follows China so closely.
The Chinese spend more of their media time consumption on the internet than any other nation (near 50% of media time). At close to 50%, US Global Investors believes an opportunity exists in the monetizing of Chinese internet usage.
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