Introduction: China’s Need for Efficient Logistics

Abstract

In our time, not one day goes by without magazine articles, TV reports, or discussion rounds about the latest developments in China. The dynamics taking place in the country with the largest population worldwide arrest the world’s attention. China equals the land area of the United States of America (USA), but has more than 4 times its population. China’s gross domestic product (GDP) has grown with an annual average rate of 11 per cent between 1994 and 2004, and has confirmed this growth again in 2005 (10 per cent real growth) (Guojia tongji ju [National Bureau of Statistics] 2005: 3-1)¹. As a result, China is now the world’s second largest economy after the USA² (Guojia tongji ju [National Bureau of Statistics] 2005: 3-1).

Growth numbers are based on official statistics provided by China’s National Bureau of Statistics (NBS) and do not reflect realistic values according to widespread conviction. Goldman Sachs argues that authorities are suspected of smoothing out valleys and peaks in GDP statistics on purpose in order to paint a false picture of economic stability. Goldman Sachs’ analysis based on the expenditure method (as opposed to the production method used by NBS) shows a much stronger slowdown in real growth in the late 1990s, from a rate of 12 per cent in 1995 to under 5 per cent in 1999, followed by a rapid recovery after 2000 to over 10 per cent in 2002. Goldman Sachs’ own measure for GDP growth, the Goldman Sachs China Activity Index, reflects the above findings: according to the Index, growth momentum slowed from 10 per cent in the first half of the 1990s to only 3.5 per cent in 1998, but it has since increased significantly, to nearly 10 per cent in 2002 (Goldman Sachs Global Economics Research 2003: 5 et seqq.).

For 2005 GDP at purchasing power parity (PPP). Chinese GDP at current market prices is only about one fourth of GDP at PPP (EIU 2006).