China might NEVER become the biggest economy in the world

It is often assumed that given China's remarkable growth rates over the past three decades – around 10% real GDP per year – China is on the way to soon becoming the largest economy in the world. In fact earlier this year it got a lot of media attention that when the World Bank argued that China already had overtaken the US as the largest in economy in the world. However, the argument was completely bogus as it was based on Purchasing Power Parity (PPP) rather than on actual exchange rates (To be fair we should blame the media rather than the World Bank for this interpretation of the data).

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China plans Asia-Pacific 'mega FTA'
The Chinese government has suggested looking into the viability of a mega free-trade agreement (FTA) with other countries in the Asia Pacific. According to Assistant Commerce Minister Wang Shouwen, China believes that the booming FTAs in the region may trouble businesses with differing standards. Wang has said the working group will study the possible economic benefits of an Asia-Pacific FTA where current regional FTAs can create an extensive deal.

Invention patents in China on the rise
Mainland China has seen a rise in invention-patent applications as it seeks to create an innovation-powered economic system. The State Intellectual Property Office (SIPO) received 156,000 invention-patent applications in Q1 of this year – a 10.6% increase year on year. A survey that the SIPO and the National Bureau of Statistics conducted has found out that for each 10,000 people, 4.2 invention patents were received when March ended or slightly more than during the same period last year.



Chinese developers seek alternative financing as investors grow wary



China says plans to speed up investment, stabilize demand - By Koh Gui Qing and Xiaoyi Shao
BEIJING (Reuters) - Premier Li Keqiang said China will speed up investment and construction plans to ensure domestic demand expands at a stable rate - an indication authorities are considering practical measures to support slackening economic growth. Li said at a weekly cabinet meeting that China needs to roll out approved plans for growing domestic demand to keep growth in the economy in a "reasonable range". No further details were given in an official statement following the meeting, and it was not clear if Li had given authorities a green light to accelerate new investment, or to start work on projects that have already been approved. But his remarks, which came after China quietly revealed last week that it had signed off on 142 billion yuan ($23 billion) worth of railway projects this year, stoked talk among analysts that Beijing is ready to stimulate the economy. China rattled financial markets earlier this month with data showing growth in investment, retail sales and factory output plumbing multi-year lows in January and February. Investors, multinational companies and its major trading partners fear a sharper-than-expected slowdown in China will soon drag on activity across the world. Ramping up state investment to shore up the economy has been par for the course in China in recent years. In 2008/09, in the face of the global financial crisis, Beijing approved a whopping 4 trillion yuan ($645 billion) of state spending funded partly by bank loans. That spending helped China recover quickly from the crisis, but the mountain of debt incurred fed other credit problems that the government now hopes to fix, in part by abandoning its former export- and investment-driven growth model. Stimulus measures announced in several economic soft patches since then have been more modest and more focused, such as last year's spending on social housing, infrastructure and energy-saving industries, and tax breaks for smaller firms. The five railway projects tipped last week were approved in January and February and will get half of their funding from bank loans, according to the country's economic planner, the National Development and Reform Commission. Some analysts cautioned investors against taking the latest projects as an indication that China is ramping up spending again, as the construction sector usually picks up in March as the weather turns warm. They said if China does increase investment in coming months, it would be a setback for broader economic reforms, but arguably an unavoidable one as Beijing is intent on growing the economy by around 7.5 percent this year to boost incomes and employment. "Of course it will compromise reforms, but the starting point is that the government has to seek a compromise between growth and reforms," said Tao Wang, an economist at UBS. "It was always meant to be a balance." At a plenum meeting of the Communist Party last November, China announced ambitious reforms that signaled the shift of the world's second-biggest economy from investment- and export-fuelled growth towards a slower, more balanced and sustained expansion. Some changes, such as government downsizing or closures of debt-laden factories, are likely to take a back seat to avoid fuelling job losses and undermining social stability, analysts have said.



China plans investment and reform to ease urbanization drive



China's free trade zone plans herald quicker FX reforms



Blue economy becomes new growth engine for E China
Recent data suggest that China's first "blue economy" zone in east China's Shandong Province has become a new engine for growth -- and one that grew faster than the entire provincial GDP in the first quarter. The sector recorded a growth rate of 10.2 percent in the first quarter, exceeding the provincial average by 0.5 percent. Its total output last year hit 2.4 trillion yuan (about 391 billion U.S. dollars), accounting for one-fifth of the nation's total marine output, according to statistics from the Shandong Development and Reform Commission (SDRC).