Jul 29

I wanted to share a couple of recent news items that grabbed my attention on the continuing ascent of Chinese economy:

First, from Brad Setser’s Follow the Money blog, in which he documents China’s recent passing of the USD$2T threshold in their reserves:

China’s latest surge in reserves – a surge that [t]ook its total holdings over two trillion dollars – didn’t really register in the financial media. China’s first trillion was a big story. The second trillion, not so much. It generated a few news stories and blog posts, but not the kind of big feature stories that accompanied China’s first trillion.*

china-june-09-14

The second trillion though came remarkably fast. It took a few millennium for China to get its first $1 trillion in reserves (Ok, more like a decade … ). The second trillion took less than three years. Reserves topped $1 trillion in late 2006. They topped $2 trillion in April 2009.

Particularly interesting was Brad’s observation that “China’s holdings of [U.S.] Treasuries should top $ 1 trillion in about a year”.

Then from Paul Kedrosky’s Infectous Greed, who posted another interesting China factoid out from Bloomberg:

Here is an eye-opening, mirror-image chart of U.S. vs. China monthly car sales over the last four years. Note that the y-axis scales are different, which make the reversal in fortunes even more impressive.

cars

[via Bloomberg]

Is this sufficient to signal the ascension of China as the predominant economy of the world?

May 28

My dad’s first wish upon moving to North America was to own a General Motors car and specifically an Impala. The brand had such prestige in other continents. The Impala he finally bought in 1975 was a great car. When I met my father-in-law for the first time in the late 80s – he was driving a late-70s vintage Impala – he was also sold on the brand.

1976 Impala 4 Door

1976 Impala 4 Door

My dad’s next General Motors car, a Delta 88, which he bought in the early 80s was not the same. I remember he had many problems and my mom still complains that repairs on that car were just not worth it. By the mid-80s, the GM brand was losing its luster.

My dad now drives a Toyota Camry and loves it. He wants another one, this time a hybrid. My father-in-law drives a Honda Accord. 30 years from top of mind, to non-event.

GM will likely go bankrupt on June 1, 2009 (Bloomberg).

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