In an exulting turn of tables, China overtook Germany as the third largest economy in the world with its GDP for 2007 grew by a whooping 13% and stands at $3.38 trillion!! Japan ($4.4tn GDP) is positioned at no.2 while USA ($13.8tn) is the ultimate ruler.
But the sad news is that, 13% GDP growth notwithstanding, per-capita income in China is still way less than major leading economies of the world. Its $2,360 per person. Pitched against Germany’s $38,800 per person, China appears to be a relatively poor country.
Nevertheless, the fact is out, loud and clear. If the current growth rate is maintained, China would take over Japan in the next 4 to 5 years and be at the 2nd position. But that’s a Herculean task indeed, given the impact of current global recession on Chinese economy. Even a low growth rate of 6% is any economy’s dream in this financial turmoil.
The role of China in international politics and economy is becoming prominent and intense by the day. From successful hosting of the Olympic games 2008 to sending troops to Somalia to fight off pirates, to sending men into space, China is becoming all the more conspicuous on the world map. It is a major contributor to world economy with sufficient stake in US economy as well.
Stark changes have surfaced in China as compared to what it was 30 years back. The changes have obviously been for the better. The free- market policies also worked in its favor. Hu-Jintao is the proud prime minister of a nation of 1.3 billion plus people taking, taking it steadily towards glory.
But the major challenges facing the nation, that of population explosion, aging population and decline in exports as a result of global recession are sure to be an obstruction. Maintaining its newly gained status is a though is not that tough a task as all the economies are affected by the financial crisis.
