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.*
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.
[via Bloomberg]
Is this sufficient to signal the ascension of China as the predominant economy of the world?
