Re-writing world history with China’s economic boom

Ekaterina Volozova

BEIJING—(October 11, 2010—M4relay)– China’s household wealth is said to double if the country continues the current growth rate. According to Credit Suisse, the total household wealth in China could actually double to $35 trillion up from the current $16.5 trillion by 2015.

Currently, China is third in terms of global wealth, after the U.S and Japan, and 35 percent ahead of France, which is Europe’s richest country. As of now, it is almost five times bigger than that of its rival Asian economic powerhouse – India.

In the second quarter of 2010, China officially surpassed Japan as the World’s second largest economy, reported New York Times – and only a decade ago China was in 7th place in the world’s ranking of biggest economies.

According to Credit Suisse’s inaugural wealth report, about a quarter of the Worlds 1000 billionaires live in the Asia Pacific Region.

China has a large proportion of what is considered ‘middle segment’, that is individuals whose income is $10,000 to $100,000. This group comprises 23.5% of the global population and holds 16.5% of total wealth, according to Credit Suisse.

The Head of the Global Research for Credit Suisse Private Bank, Giles Keating told the Wall Street Journal that it is this group in particular that will be reshaping the global economy in the future.

“China’s investment rate as a percentage of gross domestic product is still at around 40%, which allows for very rapid capital accumulation,” said Keating at a media briefing in Hong Kong.

This means that spending on things such as healthcare, recreation, clothes, travel, etc… will gradually increase.

China is becoming a major driver in growth around the world. Beijing is beginning to shape many global affairs. Many analysts predict that the dollar will begin to phase out as the World’s main reserve currency, according to the New York Times.

Even during the most difficult times, during one of the worst economic crises, when most of the World was struggling to grow, China backed a $586 billion stimulus plan.

This year, the forecast is that China’s economy will expand about 10 percent, according to New York Times. Wang Tao, an economist at UBS in Beijing, said that this is only the beginning. “China is still a developing country. So it has a lot of room to grow. And China has the biggest impact on commodity prices — in Russia, India, Australia and Latin America,” he told the New York Times.

Nicholas Lardy, Senior Fellow at the Peterson Institute for International Economics, in a recent interview with the New York Times said “China is already the primary determiner of the price of virtually every major commodity.”

The economic boom in China has seen the rest of the world scramble for cooperation, trade and bilateral relations with the Chinese government. China’s rapid growth rate suggests further suggests that the economic boom may be setting in the West and rising in the East, making the East to be a main player in all four corners of the Earth.

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