China looks north

February 11, 2013

The latest chart from the Wall Street Journal shows China’s investment in Canada more than doubling that of the US. The US economy is 10 times larger than the Canadian one so the data are rather startling. Undoubtedly the $18 B takeover of Nexen by CNOOC is embedded in the figures.

Consider:

• In 2011 the US had a per capita income of $48 K-14th in the world ; China’s per capita income was less than $5K -91st in the world. Canada was at $50 K - 9th in the world.
• U.S. consumers spend approximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States. In 2012, the US trade deficit with China was 315 billion dollars.  That was the largest trade deficit that one nation has had with another nation in the history of the world.
• According to the World Bank, U.S. GDP accounted for 31.8 percent of all global economic activity in 2001.  That number dropped to 21.6 percent in 2011.
• China has the highest savings rate of all nations in the world.
• In Beijing the average price of an apartment stood at 25,075 yuan ($4,012) per square metre in January, up 2.27 per cent on the previous month, and 5.93 per cent on the same month last year, according to China Index Academy. In Shanghai the average price was 27,655 yuan per square metre, up 2.3 per cent from December and 1.72 per cent higher than a year ago. In Guangzhou, the average price rose 2.14 per cent month-on-month and Shenzhen rose 2.18 per cent when compared with that of December.

Commentary

Canada’s liberal immigration policies have attracted upper class Chinese immigrants to Vancouver, and to a lesser extent, Toronto, one reason behind the high property values in Vancouver.

China is the biggest nation of savers. The savings are needed by the populace to fund their retirement and provide a social safety net. China is now the largest creditor nation in the world. It’s savings get recycled back as loans to western governments and into capitalistic enterprises, some of which invest in the north.

China is investing in production for a generation now. As a result it’s GDP is slated to surpass that of the United States in about a decade from now.

China has invested in the oil sands and in base metal mining projects in northern Canada. China has not invested in Alaska or in precious metals-gold or silver.

Sources

• a)http://www.zerohedge.com/news/2013-02-11/guest-post-show-anyone-believes-things-are-getting-better-america



• b)http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nominal%29_per_capita



• c)http://english.people.com.cn/90778/8040481.html