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Russian economy soars while Chinese economy falters
The Epoch Times
Facing the daunting task ahead of them, Russia started its economic reform.
economy had finally bottomed out and started to recover.
During the last two years when President Boris Yeltsin was in office, the situation had started to turn around. The production of the manufacturing sector increased, and the market started to show signs of life throughout. When President Putin took office, the Russian economy even started to boom.
With the social system working well and the financial situation dramatically improved, all the delayed payments and pensions were finally paid off.
Over the past five years, the Russian economy has been increasing steadily, and it continues to improve day by day.
In 2003, the Russian economy experienced an economic boom, with the GDP (Gross Domestic Product) increasing as high as 7.3%, reaching $465.2 billion at $3,200 per person.
This was 3-4 times Chinese personal income. Average family income increased 13.5%, and pensions also increased 7%.
The unemployment rate was lowered to 6% from the double digits in the year 2000. Profit of enterprises increased 60%; capital investment also increased 11.2%. The flow of funds out of the country decreased to $2.9 billion. Moreover, some of the funds actually started to flow back to the country. In the same period, there was an average of $40 billion flowing out of China annually. The Russian government continued to experience a surplus which reached $14 billion, while the Chinese government maintained an average deficit of $40 billion each year.
When the Russian government started to lower its foreign debt, it claimed that it could pay off its debt ahead of schedule.
In 2003, export increased dramatically and the trading value was as high as $209.2 billion, a 24.3% jump. The trade surplus reached $60 billion. In 1999, the Russian government started to consider foreign investment. Since then, foreign investment increased rapidly, reaching $6.5 billion in foreign investment in the last year. The Russian currency, the ruble, steadily appreciated in value. It has appreciated 5.3% in the last year. The Russian stock market was hot as well, climbing 54% for the last year.
As the Russian economy and the investment environment have improved dramatically, many international authoritative monetary institutes have raised Russia’s credit rating. In the international community, people have started to discuss the phenomena of the Russian economy. Analysts also started comparing the Russian economy with the Chinese economy.
For example, concerning the labor market, China has a huge cheap labor pool; however, the Russian labor pool is of better quality and consists of people with high education levels. In regard to foreign investment, China has attracted much more foreign investment than Russia since China started 15 years earlier than Russia. On the other hand, Russia actually has more advantages to attract foreign investment since the Russian economy has more potential and the Russian social system is better developed. It draws a conclusion that the Russian Bear will surpass the Chinese dragon. Obviously, if Beijing continues to delay political reform and even refuses reform, China will again fall behind Russia.
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