When will China overtake the U.S, economically?

CAC1001

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

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

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

MarcoD

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

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

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'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

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

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

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 think CAC1001 meant Opium Wars.

Evo

What? In what way?