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Обращаем внимание на инновацию, созданную на данном сайте. Внизу главной страницы расположены графики,  которые в on line демонстрируют изменения цен на мировых рынках золота  и нефти, а также экономический календарь публикации в Интернете важных мировых экономических индексов 


IEE Forecast [17]. China. Part 1.

(Analytical information)

The Institute of evolutionary economy predicts, that the apogee of a competition for global leadership will be in 2030-40. It will become clear who will be the next economic leader. Despite of impressing economic dynamics, China can apply only for general leadership, but lags behind in qualitative. However it may be sufficient…

General economic character of modern China

On millennia change, when the leading G7 countries tested recession of economic dynamics, China had high rates of economic growth. For five years (since 1998 to 2002) Chinese gross national product have made 7,9 %.

According to the official data rate of growth of gross national product in China in 2003 has achieved 9,1 %, growth of industrial production - 12,5 %, services - 6,7 %. Negative parameters in 2003 were shown only with agricultural sector, but it had no essential influence on economic changes.

Parameters of foreign trade activities

External economic expansion of China is displayed through its commodity export. After the introduction into WTO (2001) in 2003, active trading balance of China in foreign trade with partners has made $25,4 billion ($30,4 billion in 2002)

 For this year import volumes have grown for 39,9 % up to $413,1 billion. Volumes of trade with each of the basic trading partners (Japan, the USA and Europe) - have exceeded $100 billion.


The maximal value of active trading balance made $43,5 billion in 1998.

The major items of Chinese export are technical equipment, electronics, and consumer goods. The major items of import are steel and automobiles.

In 2003 currency reserves have increased for 40,8 % and for the end of year has made $403,3 billion. The Volume of gold reserves has reached 19,29 million ounces.

 According to expert estimations, the significant part of stocks of a foreign currency is in exchequer bonds of the USA. Experts assume, that China is the world's largest holder of the international liabilities.

Monetary policy

Growth of monetary unit M2 has made 19,6 %, and crediting volumes have increased for 21 % in 2003.

The rate of inflation in China in this year has reached 3,2 %.


In the beginning of 90th in economy of China there were cases with significant growth of inflation (in 1993 - up to 14,7 % and in 1994 - up to 24,1 %). But at the same period gross national product exceeded 12-13 %.

In 2003 four state banks of China have given credits for $157 billion, that on 20 % has exceeded a level of 2002, and in relation to gross national product has made about 11 %.

We may observe high level of economic trust of Chinese people to the government and, accordingly, to bank system. It shows savings, and their volume makes 89 % in relation to gross national product. 

At the same time, Chinese bank system causes the greatest alarm for foreign investors. So, for example, it agrees to data of Standard and Poor's, that the volume of the delayed credits in China makes about 50 % of gross national product. It is necessary to emphasize, that the decision of problems of bank sector has basic value for foreign banks, which, according to conditions of the introduction of China in WTO, by 2007 should get access to the Chinese market.

For economic safety of China excessive control of new projects by local authorities can cause serious risks. In case when there is a substitution of bank functions for administrative, there is a so-called phenomenon of "regionalism" - insubordination of local authorities central and infringement on this basis of performing discipline. Local authorities quite often ignore instructions from the center and, actually, they supervise the local market. And as in 2003 the share of projects controllable by them has reached 86 % from the general number, any decision of local authorities connected, for example, with development of new manufacture inevitably puts enormous pressure upon local banks.

IEE Comentary:

A country should have one issue center - the central bank. It should be fixed by the Constitution of the country. If this condition is not observed, the number of issue centers will make the number of independent regions in a country. It will divide into parts finances. There are risks of recurrence of destiny of the former USSR.

While the country has great currency reserves, these risks can be compensated, but not during system crisis periods.


The population of China does not require comments. However, in spite of the fact that China always was the global leader for population, its most rough growth was at 80 - at the beginning of 90th of XX century. This factor is important for economic growth and in case of a successful scientific and technical and innovative policy it is capable to move Chinese economy to global leadership.

The basic macroeconomic parameters of Chinese economy in 2004 (compared with 2003)

Gross national product  - 13,6515 trillion Yuans, economic growth -  9,5 %.

Rate of exchange. US$ 1 = 8,2765 Yuans.

Inflation. Rates of growth of consumer prices - 3,9 %.

Unemployment. Employment has increased by 9,8 million people. The registered unemployment has made 4,2 %, having decreased on 0,1 %.

Investments. The total sum of capital investments in a fixed capital in China has made 7007,3 billion yuans, having increased for 25,8 percent.

In economic sectors the added cost of production:

- Agricultural sector of economy - 2074,4 billion Yuans - growth on 6,3 %.


Grain harvest has made 469,5 million tons, having increased for 9 % in comparison with 2003, and it has ended a five years' decrease in grain productivity (since 1999)

- Industry - 7238,7 milliard Yuans, (growth for 11,1 %).

- Services- 4338,4 milliard Yoans, (growth for 8,3 %).

The sharp increase of monetary import, has led to deficiency of trading balance in I quarter 2004


According to economists, in I quarter 2005г. internal share of gross national product in China has grown by 8,8 % in comparison with the similar period of the previous year. In the report published by the State information center of, it was said, that increase in demand at the home market and growth of export have given a powerful pulsh to economic development of the country.

 According to the center experts, in I quarter of the current year growth of investments in the Chinese economy have reached 24 %, and the retail revolution of consumer goods has left at the level of 175,3 billion, that is 13,4 % more, than for the similar period in 2004.

Export of China in April has grown for 32 % in comparison with April, 2004 - up to $62.2 billion., while the volume of import has increased for 16 % - up to $57.6 billion. The active balance of trading balance, thus, has made in April $4.59 billion. In comparison with March, 2005. it made $5.73 billion, and deficiency in $2.26 billion in April, 2004. Demand for fabrics and electronics is still very high, and will continue to grow in the American market good rates ", - the economist of Pacific region from UBS AG Dzhonatan Andersen has stated. He has raised the forecast of growth of the Chinese export for the current year from 20 % up to 27 %. Analytics expected, that average growth of export in April will make 33 %. The growth of import reached in June 51 %, it should be slowed down, according to their expectations, up to 18 %.

Influence of economic growth in China for European Union in 2005

The EU commissioner on trade Peter Mandelson said, that Eurocommission will conduct an investigation, as there was sharp import growth of cheap textile products and clothes from China. Statistics on sales for the first 4 months 2005 " was full of mistakes".

According to statistics, the share of imported T-shirts from China in I quarter 2005 has increased for 164 % in comparison with the similar period of the previous year. It has reduced the market price in the market for 26 % that can be good for buyers, but is an accident for the European textile industry. As a whole, on different positions, from the beginning 2005 the Chinese import has increased from 51 % up to 534 %. " Europe mast react, as its manufacture " disappears", - P.Mandelson has emphasized. He has added, that he is going to discuss the problem with Chinese representatives.

The EU commissioner on trade has also announced, that oeither authorities of China will enter restrictions on export of the goods into Europe, or in the World Trading organization (WTO) three-monthly consulting process on this question will be initiated. Besides Europe, the issue of restrictions for China is also examined by the USA.

Informational sources

1. XV всекитайский съезд КПК - торжественное событие на пороге нового века//Издательство "СИНЬСИН", краткие сведения о Китае (специальный выпуск). -Пекин.

2. Синьцзян Китая//Пресс-Канцелярия Народного правительства СУАР., Изд-во "Учжоу Чуаньбо".

3. Дорога в Поднебесную: Made in China // К2К. -

4. Л.С. Васильев. "История Востока"// Заметки из истории. -

5. Селищев А.С., Селищев Н.А. Китайская экономика в ХХI веке. - СПб.: Питер, 2004. - 240с.  6. Модельски Дж., Томпсон У. Волны Кондратьева, развитие мировой экономики и международная политика. // Вопросы экономики. - 1992. - № 10. - С. 49-57.

7. Кузьменко В.П. Дослідження соціально-економічних циклів. // Статистика України. -   1999. - № 1, С. 54-59. 

8. Кузьменко В.П. Історичні цикли України та Росії в теорії соціально-економічного генезису. // Стратегічна панорама - 2002. - №2, С. 177-192.

I.P. Makarenko

Institute of Evolutionary Economy


With active participation of V.P. Kuzmenko and M.M. Voronchuk

Posted on the website: 2005-05-23

Comments on this article:

Прогноз ИЭЭ #6 (69). Мировая экономика получит импульс экономической активности в начале 2009
 среду 08.10.08 семь центробанков мира одновременно понизили учетные ставки на 0,5%
The forecast of the IEE #3 (59). Economic dynamics in Ukraine for 2007
In 2007 on the forecast for Ukraine following risks will be imposed
The forecast of the IEE #2 (58). Currency tendencies for 2007

Summing up 2006 it is already possible to speak, that for US dollar it was one of the best periods. We shall recollect even the end 2004 beginning of 2005 when its rate has sharply gone downwards in relation to practically all leading world currencies

The forecast of the IEE #8 (47).

In political relations between Yushchenko and Timoshenko eccentric events must happen to May 2006 (the Forecast on Hlebnikov Part 3)

Forecast IEE #7 (46). Europe: simultaneous growth of risks and sociopolitical pressure
The increase in the discount rate by the European central bank (ЕCB) in 2006 will cause a growth in the risks in the economies of incorporated Europe
The forecast of IEE #6 (45). Exchange risks of the world in 2006
afraid, that in the second half of 2006 the dollar exchange rate in the world exchange markets can fall to 30 % - 45 % in relation to ...
IEE Forecast [16]. Ukraine will not avoid crisis, if not to take precautions and not to start innovative processes
After year 2006, the economy of Ukraine will step in a phase of its first serious economic crisis
IEE Forecast (15). American economy will absorb the world capitals like a powerful pump in 2005
Even today we may predict the result of a FRS experiment on driving of the American economy from " a soft patch " at the beginning of 2000
IEE Forecast. If there are no innovative priorities, the habitation market will become a risky point of the fund for business and investors.

The real estate sector is a small drop, and but for economy it reflects the bitter history of Ukraine, and (without exaggeration) all the CIS history.

IEE Forecast (13). Investments outside of systemic innovations go "nowhere": on the lot of oil and dollar
World prices for oil and dollar exchange rate will be "the valve of constant pressure " for economic growth
IEE forecast and comment (II). If the discount rate will raise, dollar will strengthen
Though practically nobody doubts a possible FRS decision to raise a discount rate by 0,25 %, the world of analysts of the currency market has stopped waiting
IEE forecast and comments. On a sudden problem of " canceling of the obligatory sale of 50 % currency proceeds"
Political risks in management of economy do not weaken in Ukraine. That can provoke an economic crisis even in a short-term prospect (after 2006)
IEE Forecast. Dollar, oil, steel, and the global innovational system will influence the world dynamics
Factors, which will influence economic dynamics in the nearest future
IEE Forecast. Ukrainian economy is most likely to remain excessively dependant on tools of economic policy in 2005
Most likely, innovative processes, capable to bring Ukraine forward at any commodity or technological sphere will not start in
IEE Forecast. The World Economics Will Run a Fever For Some More Time
According to leading economist's opinion, continuous decrease of long-term rates in the world's most developed countries is one of the greatest puzzles in the financial world today. The problem is important for the USA, and other national economics
IEE Forecast. The World Economics Will Run a Fever For Some More Time
The world economics will run a fever for some period (5-10 years). It will suffer decreased production effectiveness, raised consumption of oil in China, price fluctuations for fuel. After that, we will experience an unprecedented and grand innovational project. The project will change the quality of all the world economics, absorb all the free capital, and increase long-term yield.
IEE Forecast: Growth of a dollar exchange rate can cause growth of the external economic risks for Ukraine
As to the internal factors, which compensate specified risks, it is necessary to carry significant potential of economic growth to them due to activization of internal consumption. It is a question of activization of the factors removing restrictions on ways of incomes growth of people, of fine and average business.
IEE Forecast. In economic there can be a slow economic growth with the crisis periods
The deficiency growth of the account of current operations in the USA is connected first of all with smooth and deep downturn of a discount rate.
IEE Forecast: on a dollar exchange rate, OPEC conference, and session of FRS board, Bush's speech and meeting of G7.
Events of this week will leave the trace in 2005 World discussions
IEE Forecast
The committee for Federal Reserve System (FRS) in the USA (FOMC) will raise a discount rate for 0,25 % having brought it up to the value of 2,50 % at the next session, which will take place on February 1-2, 2005.
IEE. In the coming year the price for gold will continue to grow
Gold already would seem ceased to carry out function of money, again in the price because of the monetary markets dynamics.