Sunday, March 14, 2010

CHINA : SHIFTING CONCENTRATION OF WEALTH.

China is now on the discussion table of every economy due its GDP growth above 10% followed with fastest recovery of any economy our of the recession nights.
Inflation of china and the asset bubbles in every corner of china is now a matter of concern for the world economy. They are afraid that if the bubble goes for burst out then the nights of recession will be longer. Economist and every financial equity market analyst have raised many reasons to justify and bring forth the danger of Chinese economic recover. China very recently posted its inflation number which rose to 2.7% year on year in February according to the National Bureau of Statistics (NBS). Food prices rose 6.2% last month year on year, with non-food prices rising 1% from a year earlier.
Inflation is a shadow of higher GDP growth which I have discussed in my article named. So there is nothing new to be covered for the justification of inflation. Inflation have many reasons to take birth. But in case of china it will be completely wrong to blame the activity of fiscal stimulus package giving birth to inflation.
Historically China has been a high ambitious country always focused towards becoming No.1 in every economic activity. Now how much ambitious is,lets discover that.

• Very recently China ranks No 2 on Forbes billionaires list shows the proof of the pudding.

• China has been very focused toward the development of its citizens.

• They have formulated policies and strategies which will promote wealthy ness among the citizens.

• It was not among those economies that have given in one hand and taken back double in another hand from the citizens.
Now what types of policies have been taken over is very well known to my readers so I will not be boring my readers with old analysis. Since this part of analysis has been carried much earlier by many former writers from every corner of the world I will not add any more ink to it.

China in total is having 64 people from the Chinese mainland, which made into the Forbes magazine list of the world's richest billionaires.

• This also moved them up to take second place for the first time. Among the super-rich from the Chinese mainland, 27 made the list for the first time.

• 25 people from Hong Kong made it into the billionaires club, while 18 Taiwan people entered the list. More than 10 percent of billionaires on the list came from the Greater China Area, namely the Chinese mainland, Hong Kong, Macau and Taiwan.

• Now all these position have been bagged off when the world economy was busy is struggling to come out of the recession nights.

• Those 27 new entrants have accumulated the wealth and made in to the Forbes list in the recession times.

• The rich are getting richer too. In one year the average wealth of the billionaires has increase $500 million each.In simple terms china is creating its citizens to compete with the rich category of the world richest.

• This also reveals that the government polices and packages other than the recession ones are helping to create rich people in china.

• Savings and income are being promoted by the Chinese governments’ decade after decade. The growth of china is being reveled in real sense through its citizen’s wealthy ness.
China has also reduced the gap between rich and poor. This has been possible by promoting the savings parity among the citizens of china. China is having the highest rate of savings among the whole of Asia. 45% is china’s savings followed with South Korea at 39% and Singapore and India at 34% each, according to a survey report released Tuesday by HSBC Life Insurance. The savings is backed up by major financial assets which comprises mainly of bank deposits, followed by housing, stocks and medical insurance. So the creation and preservation of wealth is happening at equal rate in china.

In fact Chinese consume less and save more which results to creation of internal wealth of Chinese economy and rich citizens followed with reduced gap among rich and poor. China has finally declared the verdict that it is SHIFTING CONCENTRATION OF WEALTH. It will be wrong to say that china is creating world’s riches at the cost of other economies. China is in the game for the past 5 decades. In my second part I will bring forth the real player who creates wealth for china and will make china No.1 in the coming years.

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