When will China overtake the U.S, economically?

[WhoWee]

Can anyone name a product that was conceived of - developed from the ground up (100% of the original R&D), including prototypes, testing, and with a comprehensive marketing strategy that now leads the world in it's category?

Please don't argue fortune cookies or other nonsense - think modern consumer product.

 

[CAC1001]

I question whether China has actually even surpassed Japan in GDP. As I've said before, I think China is a ticking time bomb that is in the midst of a massive bubble right now. Quite a few others believe this too, two prominent ones being Jim Chanos (who forsaw Enron's collapse) and economist Nouriel Roubini (http://www.project-syndicate.org/commentary/roubini37/English" ).

The concern over China acquiring an overall larger GDP than the U.S. is that they can fund a very large military for what they want to do (control that region of the world). That said, I do not think they will surpass the U.S.'s GDP. All of these nations, during their growth phases, can gain an aura of invincibility. It happened to the United States even during the 2000s, when economist Ben Bernanke gave a speech talking about how we had entered a "new era" in which major recessions were a thing of the past and so forth, Dubai thought they were invincible, Japan thought they were invincible during the 1980s, Ireland thought they were invincible, etc...people thought the Soviet Union was leaving us in the dust even. I also do not buy that the Chinese government takes into account the long-term as opposed to the short-term as our politicians do. Enacting such a big stimulus as they did, the fact that the local Chinese governments have economic growth targets to meet, along with corruption in the Chinese government and state-run Chinese enterprises, etc...none of that indicates taking into account the long-term. Recently, China's government has had to assume the liability for about $308-$463 billion worth of bad loans from the local and regional Chinese governments (http://www.cnbc.com/id/43228404/China_s_Enormous_Local_Government_Bailout" )

I think China's government is scared to death of a major uprising in the country. That is why it pushed through that massive infrastructure stimulus and why they have been censoring heavily in the country regarding the uprisings in the Middle East. China has no social safety nets of any kind. They have ethnic tensions in the country as well. If the economy stalls big time, then things could really explode beyond the ability of the Communist Party to control them.

An interesting "bubble indicator" as well is those who say it is not a bubble. Well, they "could" be right, but I mean that is whwat has been said about almost every major bubble in history. You look at Japan in the 1980s, the Soviet Union, the Dot Com bubble, the real-estate bubble of the 2000s, etc...you could find very smart people (economists, investors, traders, etc...) who could give a good, detailed argument on why "This time, it's different!" We see some doing the same with China right now.

Another interesting thing regards skyscrapers and art. Alongside Japan's real-estate bubble during the 1980s was a massive art bubble. And, in addition to an apparent massive real-estate bubble, China also is undergoing a big art bubble as well: http://www.thedailybeast.com/articl...about-to-burst-says-vikram-mansharamani.html"

Regarding skyscrapers, the construction of very tall skyscrapers has also often served historically as a great bubble indicator. Right now, five of the ten tallest buildings are under construction in China:

http://www.forbes.com/2011/03/10/skyscrapers-burj-dubai-leadership-leaders-bubbles.html"

http://finance.yahoo.com/tech-ticker/look-out-below-why-skyscrapers-are-classic-bubble-indicators-536048.html"

Here are some interesting reads on China:

http://www.zerohedge.com/article/gmos-edward-chancellor-discusses-chinas-red-flags-must-read-fresh-perspective-chinas-bubble"

http://seekingalpha.com/article/259775-china-is-not-a-bubble-it-s-the-hindenburg"

http://www.businessinsider.com/pictures-chinese-ghost-cities-2010-12?slop=1#"

http://www.businessinsider.com/there-are-now-enough-vacant-properties-in-china-to-house-over-half-of-america-2010-9"

http://www.businessinsider.com/the-...bble-is-the-most-obvious-bubble-ever-2010-1#"

http://www.cnbc.com/id/43639266/Why_China_s_Local_Government_Debt_Is_So_Scary"

http://www.bbc.co.uk/news/business-14836386"

http://www.reuters.com/article/2011/07/05/us-china-debt-moodys-idUSTRE7640EN20110705"

http://economictimes.indiatimes.com/news/international-business/chinas-hidden-debt-undermines-its-sermons/articleshow/9911609.cms"

China has some major demographic problems regarding an aging population and because of killing so many of their female babies, a big problem of a severe shortage of available women for the men, major problems with pollution (they have no pollution controls on their industry), major problems with lack of quality control (they build garbage infrastructure apparently, LITERALLY---see the http://www.weirdasianews.com/2010/02/05/shanghai-wonderbridge-trash-collapses/" ), lack of food safety and worker safety standards and regulations, etc...

Also a video:

http://www.youtube.com/watch?v=rPILhiTJv7E&feature=player_embedded

I just find it hard to believe with all this going on that they are going to keep chugging along, increasing in GDP output, and blow by the United States. The Chinese government cannot circumvent the laws of economics, even though they have tricked quite a few into thinking they can it seems.

 

[lisab]

Can anyone name a product that was conceived of - developed from the ground up (100% of the original R&D), including prototypes, testing, and with a comprehensive marketing strategy that now leads the world in it's category?

Please don't argue fortune cookies or other nonsense - think modern consumer product.

Oh you just took all my fun away, WhoWee !

 

[Proton Soup]

Oh you just took all my fun away, WhoWee !

i think most cheap fireworks are still made in china. silk.

 

[WhoWee]

Oh you just took all my fun away, WhoWee !

Sorry lisab.

I asked the question because the Chinese don't compete well in the global economy with their own proprietary products - they compete on (manufacturing) price rather than (product) benefits.

I realized this over 15 years ago when Chinese factories used to send catalogs with thousand of pages of their domestic goods over with salesmen trying to break into the US retail market. The products might have been functional in the mid 1990's (when I looked through the books) but would have been competitive in the late 1960's or early 1970's US economy.

The prices were unbelievable (in container quantities) - but the only realistic distribution method would have been flea markets and garage sales - certainly not retail stores.

 

[mege]

It's a bit odd, but at the moment I consider China the best capitalists in the world. They strongly set on a route of state-led mercantilism against open free-market economies. It's the darned Dutch East India Company again, with a Chinese flag on it.

I don't, with my limited information and little economic knowledge, see them making a lot of mistakes. (Except for holding on to too much US debt. They could have traded that in for resources directly. But that also would have weakened international trade.)

It's an interesting soccer match; I am not sure who'll win this game.

I know this over simplifies things - but I feel that China is a good capitalist on the international scene, but a poor capitalist internally.

 

[WhoWee]

I know this over simplifies things - but I feel that China is a good capitalist on the international scene, but a poor capitalist internally.

To further over-simplify - China has become the favorite sweatshop of the world. However, consumers don't necessarily want the "made in China" brand - only the lower prices.

 

[shashankac655]

US brain drain?
China and Russia

 

[MarcoD]

I just find it hard to believe with all this going on that they are going to keep chugging along, increasing in GDP output, and blow by the United States. The Chinese government cannot circumvent the laws of economics, even though they have tricked quite a few into thinking they can it seems.

I read some of the links, but I don't find any evidence that they are not just right on track. With 1.2-1.3 billion people and a sluggish state-led economy, you just don't care about some incidental ghost cities. Wait a few years, and they'll just be filled and thriving. Internal debt also has no meaning in a socialist state, and their state owned banks hold more than three trillion dollars to solve that problem.

As far as the other comments on where China is in the world at the moment. Well, as far as I know, they're everywhere - first mostly in Asia and then all third world nations. It comes with a mercantile strategy, the western world is just the last picking on the dinner plate.

If the East India Company is a predictor of the problems of a mercantile strategy, their biggest problems will be poor worker's conditions and rampant corruption.

 

[CAC1001]

I read some of the links, but I don't find any evidence that they are not just right on track. With 1.2-1.3 billion people and a sluggish state-led economy, you just don't care about some incidental ghost cities. Wait a few years, and they'll just be filled and thriving.

One of the major problems with those ghost cities is that most average Chinese cannot afford them (for example the homes in them). One of the article for example points out how at the height of the Japanese real-estate bubble, inter-generational mortgages were being offered. These are also being offered in China today.

Internal debt also has no meaning in a socialist state,

Debt counts, even in a country like China. Their banks have taken on a LOT of debt in order to finance the various real-estate construction and infrastructure projects.

and their state owned banks hold more than three trillion dollars to solve that problem.

Yes, but what are their liabilities? They may well have in excess of that amount in liabilities, or close to it (no one knows for sure right now).

If the East India Company is a predictor of the problems of a mercantile strategy, their biggest problems will be poor worker's conditions and rampant corruption.

They definitely have those.

 

[MarcoD]

One of the major problems with those ghost cities is that most average Chinese cannot afford them (for example the homes in them). One of the article for example points out how at the height of the Japanese real-estate bubble, inter-generational mortgages were being offered. These are also being offered in China today.

The problem is that we are not seeing what real-estate developments actually worked. These ghost cities are probably the excesses of state-led development in places where they backed the wrong horse (too expensive housing) with a combination of internal corruption (everyone is grabbing from the state for personal reasons, so the house prices, even for the simple condos, are just too high anyway.) [Maybe it is even just stealing money from foreign investors.]

It will probably mean that 'the party,' will get angry at some officials, write of these condos, and push forward to payable homes in the next five year party plan.

Thing is, every system has its excesses. The Chinese might also report about the excess of produced waste in the US as a result from a deregulated capitalist market. It's incidental evidence.

Debt counts, even in a country like China. Their banks have taken on a LOT of debt in order to finance the various real-estate construction and infrastructure projects.

Yes, but what are their liabilities? They may well have in excess of that amount in liabilities, or close to it (no one knows for sure right now).

I agree with that, but there's also the point that in a state-led economy you can just transfer money (balance the books) internally somewhat at will. It isn't that simple, but to use what happened in pure free-market societies as a predictor for a socialist economy is probably wrong, it just doesn't transfer.

So, in a socialist society, national liabilities are less relevant than the international ones, and the international liabilities are just not there.

 

[lahaut]

The biggest problem with China today is hubris. In 25 years of observation, I have seen China change, but also the Chinese with them. Not only the BMW 750iL drivers in China, but practically the whole nation is acting as if they have already passed the west. I really have no reply for taxi drivers making 300 $ per month telling me proudly that Chinese now are "stronger" than the country I come from.
Another problem is the perception that visitors have of China. Many cities, especially in the East regions, are booming and start to look posh, but they represent only a fraction of China and even in a place like Shanghai it is not difficult to find poverty and filth. GDP goes up, but the quality of that GDP is doubtful. Majority of the housing would not pass any serious test in the west and one will be lucky if his apartment lasts for 20 years, while paying for it with an average income would take 50 years. At the moment this is concealed, many owners got compensated extraordinarily for the crappy apartments they were living in and had either a replacement or could pay off a big part at least of the mortgage of the even more overpriced new developments built on the site. But you can only play this trick one time and anyone without the luck of owning an old apartment simply cannot afford a new one unless off course they are one of the lucky few in business or with rich/corrupt relatives. Even if the leadership can contain the situation at this time, there will be a time, when the buildings start crumbling (or just topple over, like happened in Shanghai) that the fun is over.
In the meantime a lot of accumulated hate against the west is starting to show up. It used to be concealed envy, but the general feeling is that China has somehow already overtaken the west and for some lesser minds, it is time for revenge. The call for a great army is real and the frustration about China being left out for the moment of military actions around the world is for some nearly unbearable. This translates in erratic arguing with only one topic: the west is bad and needs to be punished somehow, preferably by Chinese showing their superiority. Any feeling for logic is lost in the hatred and though China itself is a victim of Islamist threats and actions in the west of China, many go as far as to flaunt support for Al Qaida and sorts. Very worrying is that these extreme views are condoned on websites like Chinadaily. For example: http://comment.chinadaily.com.cn/articlecmt.shtml?id=13663893

 

[MarcoD]

In a black and white world, a capitalist mercantile state is a force to be reckoned with. In a black and white world, a nationalist socialist totalitarian one-party state set on a mercantile strategy just isn't even funny anymore.

I have no idea what western companies are doing there, except for that the world consists of shades of grey, and they better be darned sure China is light-grey.

 

[ThomasT]

Because the area where I grew up as well as the area where I spent most of my time before retirement have experienced significant losses in manufacturing and heavy industries that have put tens of thousands of people out of work over the years, I had the idea that America's 'deindustrialization' might be a significant factor in allowing China to overtake the US economically some day. Indeed, in at least one of the links below an economist predicts that China's GDP will be triple the US's by 2040. I don't have any sort of firm opinion on the OP's question, and was wondering if the more knowledgeable contributors here might comment on the credibility of the sources and assertions in the links below.

http://www.marketwatch.com/story/goldman-conspiracy-helps-china-beat-us-2010-09-14?pagenumber=2

http://theeconomiccollapseblog.com/...alization-of-america-that-will-blow-your-mind

https://www.amazon.com/dp/0465015905/?tag=pfamazon01-20

http://www.counterpunch.org/2011/08/05/the-deindustrialization-of-america/

http://en.wikipedia.org/wiki/Deindustrialization

http://agonist.org/thatsuckingsound

 

[CAC1001]

Because the area where I grew up as well as the area where I spent most of my time before retirement have experienced significant losses in manufacturing and heavy industries that have put tens of thousands of people out of work over the years, I had the idea that America's 'deindustrialization' might be a significant factor in allowing China to overtake the US economically some day. Indeed, in at least one of the links below an economist predicts that China's GDP will be triple the US's by 2040. I don't have any sort of firm opinion on the OP's question, and was wondering if the more knowledgeable contributors here might comment on the credibility of the sources and assertions in the links below.

http://www.marketwatch.com/story/goldman-conspiracy-helps-china-beat-us-2010-09-14?pagenumber=2

http://theeconomiccollapseblog.com/...alization-of-america-that-will-blow-your-mind

https://www.amazon.com/dp/0465015905/?tag=pfamazon01-20

http://www.counterpunch.org/2011/08/05/the-deindustrialization-of-america/

http://en.wikipedia.org/wiki/Deindustrialization

http://agonist.org/thatsuckingsound

Well the notion of America "de-industrializing" is largely a myth. The U.S. is one of the largest manufacturers on the planet and up until recently was the largest, being outdone by China slightly (China is responsible now for about 19.8% of global manufacturing as opposed to the U.S.'s 19.4% - http://www.industryweek.com/articles/china_tops_u-s-_in_manufacturing_24134.aspx"). But the U.S. achieves that 19.4% with far fewer workers then the Chinese due to our much greater labor productivity.

Also, manufacturing is not some panecea to economic hegemony. It is important, but a service and knowledge economy is very important to, and this is something that China is severely lacking right now. Manufacturing in the United States hasn't so much declined (U.S. manufacturing output continues to increase year-after-year), it's that as a percentage of the economy, it has shrank over the years as the economy has grown by leaps and bounds in other areas. Manufacturing employment has remained relatively the same over the decades even though manufacturing continues to grow, which I suppose means that, roughly, the rate of manufacturing's growth is the same as the rate of increases in its productivity (so everytime a worker is replaced by a machine, the manufacturing sector grows enough to include an additional worker).

Low-margin, simpler things, such as toys, shoes, consumer electronics, etc...are manufactured in countries like China (and even then, the actual design of these products is in the United States), but high-margin, sophisticated things, such as medical devices, computer chips, instruments, sophisticated componentry, etc...are a great deal manufactured in the United States. The Chinese cheat also in that they artificially de-value their currency (which IMO the U.S. should counter with a tariff on all Chinese goods that are hurting domestic U.S. industries simply because they are cheaper due to the currency advantage) and also they subsidize certain industries as well. For example, the U.S. machine tools industry has been hurt by Chinese competition, and IMO a tariff should be levied on Chinese machine tool imports until they decide to stop de-valuing their currency the way they do.

Some myths about American manufacturing also are that it is primarily driven by the defense budget, which isn't true, that it is just a few big-ticket items that the U.S. manufactures (this also isn't true), and that American manufacturing is dominated by large corporations such as GE, Boeing, and so forth (also not true). American manufacturing consists of a whole bunch of small and medium-sized businesses along with large corporations.

On the issue of China's GDP tripling the U.S.'s by 2040, I'd put about as much stock into such a prediction as the tooth fairy. No one can predict economic growth or the condition of an economy that far out into the future. Imagine in 1981 trying to predict the U.S. economy circa 2011 for example. Such a prediction also makes the (rather large assumption I think) that China will continue growing at a very high rate of growth for the forseeable future, which is not likely. All economies that are booming are subject to busts after a certain point.

 

[chiro]

Well the notion of America "de-industrializing" is largely a myth. The U.S. is one of the largest manufacturers on the planet and up until recently was the largest, being outdone by China slightly (China is responsible now for about 19.8% of global manufacturing as opposed to the U.S.'s 19.4% - http://www.industryweek.com/articles/china_tops_u-s-_in_manufacturing_24134.aspx"). But the U.S. achieves that 19.4% with far fewer workers then the Chinese due to our much greater labor productivity.

Also, manufacturing is not some panecea to economic hegemony. It is important, but a service and knowledge economy is very important to, and this is something that China is severely lacking right now. Manufacturing in the United States hasn't so much declined (U.S. manufacturing output continues to increase year-after-year), it's that as a percentage of the economy, it has shrank over the years as the economy has grown by leaps and bounds in other areas. Manufacturing employment has remained relatively the same over the decades even though manufacturing continues to grow, which I suppose means that, roughly, the rate of manufacturing's growth is the same as the rate of increases in its productivity (so everytime a worker is replaced by a machine, the manufacturing sector grows enough to include an additional worker).

Low-margin, simpler things, such as toys, shoes, consumer electronics, etc...are manufactured in countries like China (and even then, the actual design of these products is in the United States), but high-margin, sophisticated things, such as medical devices, computer chips, instruments, sophisticated componentry, etc...are a great deal manufactured in the United States. The Chinese cheat also in that they artificially de-value their currency (which IMO the U.S. should counter with a tariff on all Chinese goods that are hurting domestic U.S. industries simply because they are cheaper due to the currency advantage) and also they subsidize certain industries as well. For example, the U.S. machine tools industry has been hurt by Chinese competition, and IMO a tariff should be levied on Chinese machine tool imports until they decide to stop de-valuing their currency the way they do.

Some myths about American manufacturing also are that it is primarily driven by the defense budget, which isn't true, that it is just a few big-ticket items that the U.S. manufactures (this also isn't true), and that American manufacturing is dominated by large corporations such as GE, Boeing, and so forth (also not true). American manufacturing consists of a whole bunch of small and medium-sized businesses along with large corporations.

On the issue of China's GDP tripling the U.S.'s by 2040, I'd put about as much stock into such a prediction as the tooth fairy. No one can predict economic growth or the condition of an economy that far out into the future. Imagine in 1981 trying to predict the U.S. economy circa 2011 for example. Such a prediction also makes the (rather large assumption I think) that China will continue growing at a very high rate of growth for the forseeable future, which is not likely. All economies that are booming are subject to busts after a certain point.

The question is "what" are both China and the US making?

It would be interesting to actually see what kinds of products are being made in the US, and what products are being made in China.

For products that are "low-tech", a lot of these products manufacturing bases are moving overseas. In terms of training workers to make these products, it is nowhere near as intensive (and also in terms of the abundance of cheap labor with the required skillsets) as a worker that has to say be involved in manufacturing an MRI machine, or some other high-tech product that requires a higher level of training.

It might actually be (and this is a conjecture but if you have actual data that answers my question that would be great) that all the cheap stuff is moved overseas and the expensive stuff (high-tech and other products that have a substantial value IP portfolio) are made in the states.

Under the above assumption if there is that skewness, then it would make sense that the "productivity" would be higher.

One thing to also note is that China's R&D capability is on the rise, and this should be kept in mind when thinking about possible future changes to productivity in manufacturing.

 

[CAC1001]

The question is "what" are both China and the US making?

It would be interesting to actually see what kinds of products are being made in the US, and what products are being made in China.

For products that are "low-tech", a lot of these products manufacturing bases are moving overseas. In terms of training workers to make these products, it is nowhere near as intensive (and also in terms of the abundance of cheap labor with the required skillsets) as a worker that has to say be involved in manufacturing an MRI machine, or some other high-tech product that requires a higher level of training.

It might actually be (and this is a conjecture but if you have actual data that answers my question that would be great) that all the cheap stuff is moved overseas and the expensive stuff (high-tech and other products that have a substantial value IP portfolio) are made in the states.

Under the above assumption if there is that skewness, then it would make sense that the "productivity" would be higher.

One thing to also note is that China's R&D capability is on the rise, and this should be kept in mind when thinking about possible future changes to productivity in manufacturing.

Don't have specific hard data, but I know that the U.S. excels in making things like medical devices, machine tools, sophisticated electronics and computers, computer chips, scientific instruments, industrial machinery and equipment, pharmaceuticals, chemicals, also big things such as automobiles, jet engines, airplanes, military things ranging from fighter jets to submarines to tanks, etc...you can find American companies making all of these things.

 

[ThomasT]

@CAC1001,
Thanks for the feedback. Nice post. I wonder if what seems to be the trend wrt the financial sector's increasing percentage of the US GDP is good or bad for the US general economy.

Also, as population growth slows down, then should economic growth slow with it?

Regarding predictions of the US and China economies circa 2040, that does seem to be overly speculative. Still, China is roughly 4 times larger than the US, so it doesn't seem too over the top to suppose that its economy might be, say, twice as large as the US's in a generation.

 

[DoggerDan]

Well the notion of America "de-industrializing" is largely a myth. The U.S. is one of the largest manufacturers on the planet and up until recently was the largest, being outdone by China slightly (China is responsible now for about 19.8% of global manufacturing as opposed to the U.S.'s 19.4% - http://www.industryweek.com/articles/china_tops_u-s-_in_manufacturing_24134.aspx"). But the U.S. achieves that 19.4% with far fewer workers then the Chinese due to our much greater labor productivity.

In volume, yes. As has been noted, ours ranges from low tech to high tech, as does theirs. The difference is that our materials science exceeds theirs. Make no mistake, however -- they've competent in high-tech, as well.

 

[Willowz]

In a black and white world, a capitalist mercantile state is a force to be reckoned with. In a black and white world, a nationalist socialist totalitarian one-party state set on a mercantile strategy just isn't even funny anymore.

I have no idea what western companies are doing there, except for that the world consists of shades of grey, and they better be darned sure China is light-grey.

As you put it, China's dominance in the world is becoming an inevitability.

 

[MarcoD]

As you put it, China's dominance in the world is becoming an inevitability.

It isn't a pissing contest, but it might happen. The western economies are still way ahead in being more flexible and richer [but 'weak' at the moment], but China just holds the bigger numbers, and the Chinese model has advantages which could make it 'win' against free-market driven economies; i.e., they can more easily play a government-backed mercantile strategy where decisions are optimized against a zero-sum economic game to become the dominant faction.

The Dutch once ruled (parts of) the world, with a few million people, just by following a mercantile strategy through. If you do the same thing with a billion people, there's is no prediction where that will end.

(It's also interesting to note why the Chinese are on a mercantile route. No doubt, the examples of Japan, Korea, and -further down history- the India Companies are inspirational, but I think a bigger part of it is that they are all well versed maoists. They are playing 'the game of Marx' against the free-trading nations. It's a long term vision, whoever continuous down that road the longest, wins.)

 

[shashankac655]

As you put it, China's dominance in the world is becoming an inevitability.

China and India had the largest economies for a large part of the last two millennia.

post 1911 China

 

[truman]

China's GDP, measured in a number of ways, may surpass ours by 2040 (or 2016 at worst according to recent interactive tools on another website), but their economic power, what I think the OP was asking about, is unlikely to overtake the US's in the foreseeable future.

China cannot command the world's investments like the US does (and the UK still does to a limited extent). The purchase of large amounts of US securities like bonds and dollars by China was meant to protect *them* from the likes of Buffet and Soros, not control the US, which they can't do to the extent the US did to the UK using the supposed 'nuclear option' in the aforementioned Suez crisis. This linking is called 'Chimerica', we buy their products, they buy our securities. It'll hurt them more than us to break it.

As mentioned, we still have a huge manufacturing economy, and while it's not a 'panacea' for an advanced economy, it's an essential, and in the US, it's unlikely to shrink or disappear in our lifetimes. In fact, during all of this recession and economic ill fortune, our productivity has skyrocketed. US manufacturing is not dying, but China's manufacturing growth is levelling out. In fact, the economic rags are talking about the migration of cheap labor from China to second tier countries like Vietnam, now to *Third tier* economies like Afghanistan, as somebody already mentioned.

China has a major demographic problem. This will start to hit in the 2030s. It's far more severe than the US's. Their 'demographic pyramid' is inverted. They have less young people than old (due to their one-child policy, perhaps avoiding a greater ill and expecting to cross a lesser-evil bridge when they get to it, in our now-immediate future.) What are they going to do to support their ONE BILLION old people who expect ever-higher levels of quality health and economic support?

China has some serious ethnic and religious problems, and they keep this quiet with staunch media control. Also, the west has been focused on our currency problems, but I wonder if the leaders in China wouldn't trade a little Greek debt crisis for Kim Jong Il, ethnic unrest, encroaching Islam, income disparity, demands for greater democracy, etc etc ad nauseum. Their environment is a disaster.

When is China's culture likely to surpass the West's? And by West I might as well mean the US/UK? Never, that's when. Never ever do I ever envision the world picking up Mandarin textbooks and teaching their kids Chinese, wearing pins of chairman Mao, quilted vests, etc. Heck, the Japanese are adorable and the most we got out of them was Hello Kitty and anime. Don't discount the economic power that comes out of Hollywood and NY.

In other words, keep your shirt on, America is likely to remain top dog long enough to face some type of Asian coalition, an Indian rise, or a resurgent Europe as challengers. I envision us not being faced down until 3 challengers out, but that's pure speculation. I give us 100 more years of top-dog status at the least.

 

[shashankac655]

The biggest of these problems for China is it's demography ,it's manufacturing is very labour intensive ,an aging population means that their manufacturing base will hit unless they rethink about their one child policy.

China doesn't have much to offer the world when it comes culture according to some

 

[Passionflower]

When is China's culture likely to surpass the West's? And by West I might as well mean the US/UK? Never, that's when. Never ever do I ever envision the world picking up Mandarin textbooks and teaching their kids Chinese, wearing pins of chairman Mao, quilted vests, etc.

I know many young people who are learning Mandarin instead of for instance French or German.

Chinese culture is pins of chairman Mao and quilted vests?
Ignorance is bliss.

 

[phyzguy]

I know this is an older post, but I wanted to point out this web site:

http://atlas.media.mit.edu/

This "Atlas of Economic Complexity" from Harvard and MIT, has a wealth of information on different countries - growth rates, export breakdowns, etc. They project that between 2009 and 2020, the US economy will grow at a 2.84% rate, and the Chinese economy will grow at a 4.66% rate. Given where they are today (2009 - US GDP = 14T$, China GDP = 4.5T$), if you extrapolate these growth rates, it will take 65 years for them to cross, so the cross-over would be about 2075.

 

[ginru]

I know many young people who are learning Mandarin instead of for instance French or German.

I'm still kicking myself for wasting 4 years studying French in high school.

But for young people now, I might even suggest going with Korean. South Korea seems to have a slightly more western-friendly, vibrant entertainment culture (catchy youth-centered music, movies, and TV shows) compared to China, and then for practical business purposes to use in marketing to and recruiting hard-working, technical labor from their immigrant communities here in the US. I'd still imagine Spanish to be the most useful 2nd language for most Americans though.

 

[MarcoD]

Chinese culture is pins of chairman Mao and quilted vests? Ignorance is bliss.

I agree with that, that's a silly nationalistic notion. Most nationalists from any nation find their own culture superior to any other culture. I am Dutch, of course my culture is superior to the US's, what else. ( that's a joke. I leave my nationalism at home with the exception of soccer games when I enjoy it; I don't think cultures are superior with maybe the exception of Iran, and I am probably wrong there.)

Man, Chinese? Five thousand years of almost continuously being the most advanced global society with the largest average racial IQ? Who do you think invented paper making, compass, gunpowder, printing, and money?

My 'nationalistic' point is that I have a really simple geographically based order of where to solve problems, since that's what my children benefit the most from: House, city, nation, continent, world. The closer it is to you, the more important you fix, or help, it.

So I don't care about Chinese much, I just find it stupid that we're investing in China when we might as well develop Portugal, Poland, Romania, etc. Why make the Chinese rich to then have immigration from the poor bordering nations in Europe? It doesn't make sense.

 

[shashankac655]

China Skipticism

 

[CAC1001]

Man, Chinese? Five thousand years of almost continuously being the most advanced global society with the largest average racial IQ? Who do you think invented paper making, compass, gunpowder, printing, and money?

What's ironic is that type of mindset on the part of the Chinese is what lost them their dominance and independence. They were so sure of their superiority to the West, that they became extremeley insular and ended up getting surpassed by the West, who then came in and forced them open.

 

[MarcoD]

What's ironic is that type of mindset on the part of the Chinese is what lost them their dominance and independence. They were so sure of their superiority to the West, that they became extremeley insular and ended up getting surpassed by the West, who then came in and forced them open.

I don't think the west forced them open. They opened up their economy to foreign investment, but that's a one-way street. If I remember correctly, US, or European, export to China is about 1% of their total; that's not open, that's closed like a clam shell. (This was a number stated on Bloomberg, no idea. Looked at it, doesn't seem right. What was probably stated was export to China as percentage of US GDP.)

I am not an economist, but I wonder whether it is even macro economically possible to earn money against such a trade deficit.

If anything, I would say the west now owns the superiority complex.

 

[vici10]

I don't think the west forced them open. .

I think CAC1001 meant Opium Wars.

 

[Evo]

I think CAC1001 meant Opium Wars.

What? In what way?

 

[vici10]

Before Opium wars China was more or less insular country. There was trade, but Chinese putted high tariff on foreign goods.

Opium wars was an attempt of British to open China for their markets.

For example:

The British demands included opening all of China to British merchants, legalising the opium trade, exempting foreign imports from internal transit duties, suppression of piracy, regulation of the coolie trade, permission for a British ambassador to reside in Beijing and for the English-language version of all treaties to take precedence over the Chinese.

The Qing Dynasty court rejected the demands from Britain, France, and the US.

http://en.wikipedia.org/wiki/Second_Opium_War

The defeat of China in these wars opened China for western merchants. Also this defeat forced chinese to think about modernization and protection against future attacks.

 

[Evo]

The real turning point was in the late 1970's.

Why Is China Growing So Fast?
In 1978, after years of state control of all productive assets, the government of China embarked on a major program of economic reform. In an effort to awaken a dormant economic giant, it encouraged the formation of rural enterprises and private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce. By nearly all accounts, the strategy has worked spectacularly.

Continued...

http://www.imf.org/external/pubs/ft/issues8/index.htm