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China May Not Overtake America this Century After All

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Photo Credit: GettyThe world’s tallest tower should have been built by now. Officials said last year that the great edifice with 220 floors would be erected in three months flat in China’s inland city of Changsha by March, snatching the crown from Dubai’s Burj Khalifa.

The deadline has come and gone, yet the wasteland sits untouched. It now looks as if the fin d’époque project – using prefab blocs – may never be approved. Even China knows its limits.

Prime minister Li Keqiang has asked the State Council to clamp down on the excesses of the regions. Not before time. A top regulator says local government finances are “out of control”.

Mr Li aims to cut China’s economic growth to a safe speed limit of 7pc next year and rein in rampant investment – still a world record 49pc of GDP – before it traps the country in a boom-bust dynamic of frightening scale.

Vested interests are conspiring to stop him, launching a counter-attack from their power-base in the $6 trillion state industries. Even so, uber-growth is surely over.

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China ‘To Overtake America By 2016’

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Photo Credit: EPA

China’s economy expanded last year at 7.8pc – its slowest pace in more than a decade – and recent data has fuelled concerns that any rebound in the country’s growth is losing steam.

However, the OECD was upbeat, predicting in a new survey of China’s prospects that the country’s economy could expand by 8.5pc this year and by 8.9pc in 2014.

While the OECD noted the slowdown in China’s aggressive expansion, it nonetheless predicted that growth should average 8pc in this decade at current rates of investment and reform.

After allowing for price differences, it forecast that China could become the world’s largest economy, overtaking America, around 2016.

Fuelling the OECD’s positive prediction was an optimistic outlook for investment spending in the world’s second-biggest economy. It pointed to substantial deficits in rail and road capacity relative to other major economies at similar stages of development, as well as to sub-standard housing as offering scope for more profitable spending on infrastructure.

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China Defence Budget To Rise 10.7% In 2013

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Photo Credit: APChina’s defence budget is set to rise 10.7 percent this year, state media said on Tuesday as the national parliament’s annual gathering opens, a slight drop from a 11.2 percent increase in 2012.

“China plans to raise its defence budget by 10.7 percent to 720.2 billion yuan” ($115.7 billion) in 2013, the Xinhua news agency said, citing a budget report that will be reviewed by the National People’s Congress (NPC), the national legislature.

China’s military budgets have risen steadily in recent years along with the country’s booming economic growth, and experts say the actual totals are usually substantially higher than the publicly announced figures.

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U.S. For Sale: Obama Lets China Gobble Up U.S. Energy

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Photo Credit: abangbay @ MalaysiaOil And Politics: Beijing plays the debt card as the Obama administration quietly lets China acquire major ownership interests in oil and natural gas resources across the U.S. at the same time it blocks the Keystone pipeline.

Normally, foreign investment in the U.S. is to be welcomed. It creates jobs, boosts economic growth and promotes trade and exports.

But when that investor is an ambitious and increasingly belligerent China to whom we owe over a trillion dollars, eyebrows and concerns need to be raised.

Reversing a Bush administration policy, the Obama administration is encouraging Beijing to acquire equity interests in U.S. energy. In 2005, the Bush administration blocked China on grounds of national security from buying California-based Unocal Corp. for $18.4 billion.

That was then, and this is now.

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In A Crummy Economy, Why Are Stocks Soaring?

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Economic growth is pitiful. Unemployment has topped 8 percent for an exhausting 43 months. The nation is careering toward a so-called fiscal cliff, and maybe a recession.

So why is the Dow Jones industrial average, that trusty gauge of corporate America’s strength, just 4 percent shy of an all-time record? And why are the smaller public companies measured by the Russell 2000 index almost there already?

Start with two words: Ben Bernanke.

Bernanke, the Federal Reserve chairman, last week announced unprecedented measures aimed at lifting the sagging economy — and boosting the prices of assets like stocks and houses. The market rallied all summer in anticipation of such a move.

The Fed made an open-ended promise to purchase $40 billion a month in mortgage bonds and said it will keep interest rates low through 2015, even if the economy starts to improve.

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