China becomes world’s wealthiest state

PRAVDA
China’s gold and currency reserves have recently hit the mark of $2 trillion. The nation can now boast of having the largest state reserves in the world. The Chinese people save up to 75 percent of their country’s GDP in spite of the fact that China does not pay pensions and does not have free of charge education and healthcare systems.

China’s gold and currency reserves gained 17.8 percent ($177.9 billion) during the second quarter of 2009. The nation’s reserves increased by $7.7 billion over the first quarter of the current year. Thus, the People’s Republic of China has saved $185.6 billion during the first six months of the year, although it was $95 billion less than during the same-year period of 2008.

China takes the first place in the world on the amounts of its currency reserves with Japan and Russia following it. Experts say that such a significant growth was achieved due to the predominance of export over import. The domination of export allowed to increase the inflow of foreign currency in the country.

Young Chinese save their cash for a rainy day, just like their parents did 50 years ago. It is considered a universal tradition with every Chinese family, regardless of their income.

All Chinese banks belong to the state – there is no market system there at this point. There is no pension system in the country either, no free healthcare and no free education at all. The people of China pay for everything themselves. That is why the level of savings in China made up 45 percent of the GDP in the beginning of the 2000s and reached the record amount of 75 percent in 2009. It is hard to imagine that the Chinese save 75 percent and spend only 25 percent. Specialists say that such a system can not be found anywhere else in the world. It is worthy of note that the Chinese savings are not included in $2 trillion of gold and currency reserves.

Experts continue saying that China will soon replace the United States as the world leader on the economic arena. The talks about China’s possible leadership emerged soon after the beginning of the economic crisis. However, no one expected that changes would come so quickly.

It is worthy of note that it is China’s Petrochina that tops Ernst & Young’s list of world’s largest companies. The USA’s Exxon Mobil was ranked first on the list only six months ago.

Daria Yurischeva