Hope for Success for Australia – 求成澳大利亚

求成澳大利亚

 

 

Premier Wen Jiabao, hope for Australia

Premier Wen Jiabao, hope for Australia

 

 

In Jan 2009, the CIA World book listed estimated growth rates for 2008 for the following regions.

China, 9.8%, (GDP PPP – USD$ 7 800 Billion)
South Korea, 4.3%, (GDP PPP – USD$ 1 312 Billion)
Australia, 2.5%, (GDP PPP – USD$ 825 Billion)
European Union, 1.5%, (GDP PPP – USD$ 14 960 Billion)
USA, 1.4%, (GDP PPP – USD$ 14 580 Billion)
United Kingdom, 1.1%, (GDP PPP – USD$ 2 281 Billion)
Japan, 0.7%, (GDP PPP – USD$ 4 487 Billion)

On Wednesday 28 January 2009, Premier Wen Jiabao delivers the speech that anybody with brains was waiting for. Premier Wen is not a failed businessman, he is not a lawyer or an actor by training. Premier Wen is a bureaucrat whose primary training was as a geologist. Premier Wen announces that China has been set the goal of 8% growth in GDP in 2009 and although this growth target would be difficult, it was achievable. A matrix of policies would be used to reach this target. The stand out feature was that the Chinese government was going spend the equivalent of 16% of the 2007 GDP or 4 TRILLION yuan over two years.

Thanks to the magic of Google (to achieve ball park estimates.)
4 Trillion Yuan is about USD$ 585 billion or AUD$ 878 Billion. It is of the same order as the amount of money the USA burnt in Iraq from Mar 2003 to Aug 2008.

If Australia was doing something similar and scale it to Australian terms, the Australian Government would allocating USD$130 billion or AUD $195 billion over 2 years at the problem.

When China (I am an optimist) achieves its goal, it is going to add USD $625 billion to their economy, or the equivalent of three quarters of the total of the Australian economy to the Chinese economy or one Saudi Arabia equivalent.

The good news for Australia is that a lot of crumbs will fall off the table. If you live in a resource state, it is possible that that you might even miss the recession.

I still find it mind-blowing that no Australian media outlet picked up on this three days later.

I apologise to all Chinese people that our Prime Kevin Rudd 陆克文 was not there at Davos to given Premier Wen a standing ovation at the end of his speech.

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8% – Why Premier Wen Jiabao 温家宝 is my hero

Best New Years News

Premier Wen Jiabao

Premier Wen Jiabao

The best economic news this month has been from Premier Wen Jiabao 温家宝 .In his speech that Premier Wen gave at Davos yesterday 28 Jan 2009, Premier Wen annouced that China’s goal is 8% growth for 2009, he did qualify it by saying it would be difficult but it was achievable. Importantly his strategy is not just based on hoping Walmart will buy stuff but a lot of money will be thrown at improving infrastructure and health for all Chinese people.

Premier Wen is talking about spending 16% of  Chinas 2007 GDP in infrastructure developement. If Prime Minister Rud was to commit to the same thing then in Australia we would be throwing some of the order of  AUD $195 Billion dollars at our infrastructure.

If there is hope for the Australian economy, this is it.

I can’t believe the Australian, the Fairfax press, or the Australian Broadcasting Corporation have not made this one of their major headlines. Do any of these main stream media outlets believe that we will come out the recession by selling houses to each other.