Sixty three years ago China labored under the heavy burden of, what then economist described as, hyperinflation. A condition signaled by a high cost of living in the face of degrading currency. Today, due to resilience, series of economic growth, strategy implementation and focus; China is a country that has grown to be one of the richest country in the world, with a purchasing power parity per capital income of $31,834, and a gross domestic product of $735,997 billion (2009 estimates), and a consistent 8% economic growth for over five years. In-line with the economic goals of China, this is a country on the dawn of 2010 disclosed its economic blue print, which is to target and maintain the growth rate of 8% per annum. The blue print includes: buying up gold reserves with the goal of ousting the United State’s currency from her present state of glory. Can this ever be achieved? To answer this, the Chinese galloping economic trend will be evaluated alongside the United States’.
For a country that has fought and won the war of economic depression rising to a full blown stable economy, surely achieving the goal of positioning the Yuan to cannibalize the USD shouldn’t be difficult, especially in the face of the crumbling economy the US faces.
Chinas gold reserve target
Gold reserve is one of the targets that China has adopted to achieve its aim of usurping the USD from the number one position and replacing it with the Yuan. By embarking in an aggressive intent to build up its gold reserves the country is set to achieve its aim. Before then, it must be mentioned that India had previously purchased two hundred tons of gold from the IMF (international monetary fund). This perhaps gingered the Chinese goal and it is speculated that with their current move they will eventually buy off the remaining gold from the IMF just to upgrade their reserves. The strategy to achieve this lofty goal is attached to allowing private companies purchase gold from the international market. The question now is, will the Chinese succeed in their quest of ousting the present world power (USA) from their position?
The answer to that question is yes. The answer is not meant to be Chinese bias, but based on the concept of change. Nothing really lasts forever and the United Nation’s attractive position is one of them. Looking at recent world history, about 5 super nations have come and gone; so also have countries like the United Kingdom (that formerly occupied the lofty position that US is presently occupying) overtaken and pushed out by others like the USA. What does this trend signify? Replacement; a country somewhere, somehow is set to take over this desired position, but the question is: which country? No one knows which country will achieve this for sure; however, China is certainly angling itself to be the prima Madonna.
Set China side by side with the USA, the tell tale signs will be magnified almost to a reality. While China is recording constant increase in their economy, the US is experiencing a plummeting economy, which is suffering from severe labor hemorrhage. And although China’s economy is producing an increasing 4% employment rate and is found wanting in many regards in comparison with the US, but with the evidence of China’s resilience, and obvious increase in economic stature along with other international agendas, China is set to take the world by storm.