China- The new SUPERPOWER

The global economic downturn, and efforts to reverse it, will probably make China an even stronger economic competitor than it was before the crisis.

"China has bittered all odds and has emerged as a super-power."

G7 Summit

The third largest economy of world has already become more assertive; now it is exploiting its unusual position as a country with piles of cash and a strong banking system, at a time when many countries have neither, to acquire natural resources and make new friends for fresh investments.

"China's leaders are turning economic crisis to competitive advantage"

Chinese PM, Wen Jiabao

The international economic slowdown is also doing some things that Chinese authorities had tried and failed to do for four years: slow inflation, reverse what had been an ever-growing dependence on exports and pop a real estate bubble before it could grow even bigger.

Seeing the same development and isolation of China, it is being speculated to surpass US by 2025.

GDP to go down to 3%

The much discussed GDP and its value has shocked a million of them leaving the values rock-bottomed to a value 20% below the speculated and the fight is not yet over(it may be the beginning).

The Financial last Quarter GDP seem to take a toll of misery with a strange value of 5.3%.

According to the reports

"Based on bull-bear case outlook for G7 (club of developed countries), we see bull scenario growth for India at 5 per cent in 2009 and 7.4 per cent in 2010 and bear case at 3 per cent in 2009 and 4.5 per cent in 2010".

Being a possible G7 entrant India has to keep its pace and reduce the Fiscal Deficit hampering the overall effect of positive Monetary Benefits to the Economy.

With the inflation bottomed at a 4 year low the pressure would now be on the upcoming government to take steps in order to reduce Fiscal deficit and cope up to the standards of G7 countries.

It is been speculated that India to surpass US by 2050, but for now the main concern is to stabilize the internal working of the economy.

However the average projected GDP for year 2009 will be 4.3% with a 25% increment in the next financial year.

GDP Constituents

The third quarter growth (October-December 2008) rate has been estimated at 5.3%, down from 8.9% posted during the corresponding period last year.

Adding to the misery is the Stringent Industrial Development with a record of 16-year low of 2% this may further increase burden of loans leading to further pressure on GDP.

G7 and G20 countries

G7 Countries

The G7 was an informal gathering of heads of state and governments of the world's most advanced economies (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States).

In the early stages, members of the G7 were accompanied at meetings by their foreign and finance ministers. In 1998, the British Presidency decided to separate the ministerial meetings from the original summit in order to keep the original concept of a small, informal gathering. In the same year, Russia joined what then became the G8. Since 2005, the G8 has been holding dialogues with the major emerging economies of Brazil, China, India, Mexico and South Africa.

G8 finance ministers meet once a year before the actual summit. However, finance ministers also meet in general three more times (early in the year, and at the margin of the spring and annual meetings of the international financial institutions), but in a G7 (instead of a G8) framework. . Since the introduction of the euro, the European Central Bank (ECB) and the President of the Eurogroup also attend. (Courtesy:Wikipedia)

The G7/8 deals with such issues as: global economic outlook and macroeconomic management, international trade, energy, climate change, and relations with developing countries.

G20 Countries

The G20 (Group of 20) is a group representing 19 of the world's largest economies plus the European Union that are strategically important and influential in the world economy. The G20 was formed as a new forum for cooperation and consultation on matters pertaining to the International Financial System (IFS).

The membership of the G20 comprises the finance ministers and central bank governors of the G7, 12 other key countries, and the European Union Presidency (if not a G7 member); the European Central Bank; the Managing Director of the International Monetary Fund; the Chairman of the IMFC; the President of the World Bank; and the Chairman of the Development Committee.

The G20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability.

The members of the G20 are the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America. The European Union is also a member, represented by the rotating Council Presidency and the European Central Bank.