I was chatting to someone about this last weekend and that the current predictions are in the region of 50 years for China to outpace the US, is this likely to happen sooner? what happens to the US and europe when China and India both have a GDP greater than the US?
Will the pace of change accelerate in the next few years based on the current financial fiasco? I wonder whether if the US and Europe attempt to implement protectionist measures that China will respond by pulling its foreign investment.
China will have a huge population, so a higher GDP than the US doesn’t mean they are wealthy. On the other hand it wouldn’t surprise me if US was stagnant or declining in real GDP per capita for that period. Hopefully our population will decline, but I doubt that.
For China to continue to progress, the bulk of their production and consumption will be domestic rather than relying on exports to wealthier countries. They will eventually need to boost wages to create a sizable middle class if they want to keep this growth going… but since they are communist, that should be easy. On the other hand too much “central” planning tends to be a big drain. I think it will be a very long time (if ever) before the people in China or India enjoy the kind of living standard that we have.
Weren’t there similar predictions regarding Japan in the 1980’s? At some point China has to run up against its issues surrounding environmental degradation, natural resource limitations, and suppression of human rights. I can see China passing the U.S. in total GDP, but it may have more to do with US decline or stagnation than continued Chinese growth.
The balance of power shift if this did happen would be really interesting.
perhaps in absolute terms. but considering they will probaby each have around 2 llion people each bu 2050 and the US will be around 500 million, the standard of living will still be starkly different. The bottom 20% in the US bitch because they have two people who work that struggle to keep their kids in Nikes and Levis while watching their big screen TVs. The bottom 20% in India and China are freaking living in grass huts, have no food to eat and lack very basic medical treatment. And in those countries there are hundreds of millions of people like that.
“The standard of living will still be starkly different.”
Not necessarily. You are living in the past, my friend.
The GDP and population are less important than the numbers of people in the middle class. The increase in wealth in Asia more than eclipses anything we have or will experience anytime soon. Very soon, there will be more “middle income” families in Asia than there are in the U.S. and Europe. We are talking more than half a billion people now and cruising toward a billion soon. They may look like working class/lower-middle class city dwellers to us (I mean they won’t have McMansions and Suburbans) but they still will require decent apartments, appliances, AC, cars, etc. That is a huge drain on resources worldwide.
“The standard of living will still be starkly different.”
Not necessarily. You are living in the past, my friend.
The GDP and population are less important than the numbers of people in the middle class. The increase in wealth in Asia more than eclipses anything we have or will experience anytime soon. Very soon, there will be more “middle income” families in Asia than there are in the U.S. and Europe. We are talking more than half a billion people now and cruising toward a billion soon. They may look like working class/lower-middle class city dwellers to us (I mean they won’t have McMansions and Suburbans) but they still will require decent apartments, appliances, AC, cars, etc. That is a huge drain on resources worldwide.
Great points. It’s the number of soon to be Asian middle-classe people that boggles the mind. What will be interesting to watch is the balancing act between what’s good for the state and what’s good for the people under a communist ideology. Practically speaking the Chinese communist party has done one heck of a job not getting mired down in ideology, it could have, but so far the leadership and avoided those missteps. Ff you visit China you cannot help be impressed that the Chinese are the next wave of the future. Lot’s of consumers, lots of needs…
Prior to the meltdown China would have had a larger GDP than the US in 2-3 years at the average growth rate they had experienced the prior 3 years.
There are a couple ways this could go. Due to the current events in the US we might pull our heads from our Arses and realize we best get to work and starting doing something for ourselves. If that doesn’t happen than I’d say China will have a larger GDP than the US in under 10 years.
Going to be interesting…If the US embraces the socialist tendencies of Europe then it will happen sooner. Then, if we implement protectionist measures, it will happen even sooner. I just wish we would quit being scared of the rise of China and India and focus on making our economies soar.
But we are all fat and happy and afraid of what we might lose versus China is looking at what they will gain…which is the better mindset?
“I just wish we would quit being scared of the rise of China and India and focus on making our economies soar.”
My thought exactly. I don’t subscribe to the fallacy that other countries becoming wealthy makes us poor. Quite the opposite–unless, of course, we react with protectionism and other dumb policies of our own.
In any case, I’m rather skeptical about whether the Chinese leaders, given their ideology, will be able to continue to keep their hands off their economy, thereby bringing their own growth to a halt.
In any case, I’m rather skeptical about whether the Chinese leaders, given their ideology, will be able to continue to keep their hands off their economy, thereby bringing their own growth to a halt.
Actually I believe exactly the opposite. Currently the leaders are full well aware that the only way they are holding onto power is by providing “Growth” as they really aren’t offering “Freedom”.
They know they have to keep things growing, and probably at unsustainable rates, or the people are going to oust them from office. The cat’s out of the bag on capitalism and there’s no way to put it back so they have no choice but to go with it.
My guess is that they will remain a completely “Pro business” even to the detriment of the populous because they know that’s the only way to keep the growth going.
They know this meltdown will set China and etc farther back then the US.
This will only be the case if the US seizes on the opportunity of “Cheaper domestic labor” and a couple other phenominom created by the crash. If we simply go back to “The way it was” we’ll take a notch back, China will take a slightly larger notch back but will expand and recover much quicker.
It’s obvious that their desire to hold power is what’s holding them back right now from taking actions that would kill the growth. OTOH, economic freedom and personal freedom tend to go together, and a system that tries to have either without the other doesn’t tend to be very stable in the long run. In the case of China, one can imagine a number of scenarios (war, political infighting, etc.) that might tempt the leaders to cease their policy of relative restraint.
BTW, if they view their policy as “pro-business,” they’re headed for trouble already, since all kinds of interventionist policies can be rationalized as being favorable to business.
One thing to consider with China is that it may be facing a bigger demographic time bomb than does the US. True, over here we have Social Security and Medicare hanging over our heads as insufficiently funded future obligations, and the retirement of the baby boomers will put a substantial strain on taxpayer resources. In China, care of the elderly generally falls upon younger family members. In the days of Chairman Mao, birth rates were quite high, but the “one child” policy has left few offspring to support China’s own “boomers.”
I’m trying to avoid injecting too much in the way of politics here, but whether elder care is in public (government) or private hands, it’s an expensive proposition - and China appears to be facing a bigger issue here.
In the case of China, one can imagine a number of scenarios (war, political infighting, etc.) that might tempt the leaders to cease their policy of relative restraint.
I guess I view at an inevitable move toward more an more democratic society. Any “Crackdown” by the government would likely lead to some level of revolt at this point and any “intervention” with the business would slow the growth which would also lead to some level of revolt.
Definitely “infighting” but I think it will likely be “Out with the old” and in with the new and more “open” with each successive generation, just a WAG though.
**BTW, if they view their policy as “pro-business,” they’re headed for trouble already, since all kinds of interventionist policies can be rationalized as being favorable to business. **
I think in many ways their policy is more “Free market” than is ours, but also I believe it is clearly more “Pro business” and as you point out rife with potential problems, the big one being “Abuse of labor”.
I have no idea how it will all shake out but my guess is that unless the US “opens up” and moves more free market they will likely pass us up. Obviously not as fast as I thought as my numbers were WAY off, but soon enough.
