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When will China overtake the U.S, economically?

by Willowz
Tags: china, economically, overtake
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cbetanco
#73
Nov23-11, 02:51 PM
P: 135
I just don't think a 9% growth in GDP is sustainable. Their entire economy has bubble written all over it. Sure, they can devalue their currency, and their government can put into effect social/economic programs a lot faster than the US, but at 1.2 billion people, how are they going to be able to sustain growth? How will they grow enough food? Also, their environment has gone off a cliff, and the land just can't sustain all those people.
Willowz
#74
Nov23-11, 04:59 PM
P: 256
Well after the secondary sector comes the service sector. So, the boom might continue. Though, the real estate market may be in for a hard landing.
shashankac655
#75
Nov26-11, 12:41 AM
P: 36
Understanding China
mheslep
#76
Nov27-11, 09:32 AM
PF Gold
P: 3,072
Quote Quote by cbetanco View Post
I just don't think a 9% growth in GDP is sustainable. Their entire economy has bubble written all over it. Sure, they can devalue their currency, and their government can put into effect social/economic programs a lot faster than the US, but at 1.2 billion people, how are they going to be able to sustain growth? How will they grow enough food? Also, their environment has gone off a cliff, and the land just can't sustain all those people.
Economic growth is not the same thing as population growth. The Chinese population will start to decline around 2050 per current trends.
CAC1001
#77
Dec5-11, 10:37 AM
P: 18
Quote Quote by shashankac655 View Post
IMO, the article gets some things wrong, or says some things that are very questionable, for example:

The West's failure to understand the Chinese has repeatedly undermined its ability to anticipate their behavior. Again and again, our predictions and beliefsabout China have proved wrong: that the Chinese Communist Party would fall after 1989, that the country would divide, that its economic growth could not be sustained,
It may not be sustainable (and that's assuming it is even as high as they say it is right now, which is questionable). Every country that is growing gains an aura of invincibility initially, until it experiences a crash of some type.

that its growth figures were greatly exaggerated,
They likely are. Constantly building empty apartments and cities and various other infrastructure that is not being used, and is likely a good deal shoddy quality, is not economic growth. It counts as GDP growth, but in the end, it isn't real economic growth (this is one of the problems with how to measure a country's GDP; during the Cold War, the Soviet Union's economy appeared a lot stronger than it really was because of all the stuff they produced, the difference being that it was all of terrible quality).

The Chinese state enjoys a very different kind of relationship with society compared with the Western state. It enjoys much greater natural authority, legitimacy and respect, even though not a single vote is cast for the government. The reason is that the state is seen by the Chinese as the guardian, custodian and embodiment of their civilization. The duty of the state is to protect its unity. The legitimacy of the state therefore lies deep in Chinese history. This is utterly different from how the state is seen in Western societies.
This I don't buy for a second. The Chinese government is terrified of a major uprising occurring, that is why it has censored completely the news about the various uprisings occurring in the Middle East and why they enacted such a massive stimulus in the first place. Keeping the population docile depends on constant economic growth. If the economy tanks (which it did as Western demand dropped off in 2008), the Chinese government stepped in to make up for that demand to provide the illusion of a still-growing economy. When they can no longer do this, there will be a big problem. If the Chinese people afford the Chinese government such a high level of respect, then there would be little to no fear of uprisings, and the Chinese could have let their economy cycle through the recession in a natural manner. As it is, China has a secret police, a national police force that puts down any uprisings that occur, and a state-run media.

Additionally, when one takes a look at the sheer level of corruption that occurs in China, we see that the Chinese are in many ways not much different than humans anywhere else. They pursue their own economic interests.

If we are to understand China, we must move beyond the compass of Western reality and experience and the body of concepts that has grown up to explain that history. We find this extremely difficult. For 200 years the West, first in the shape of Europe and then the United States, has dominated the world and has not been required to understand others or The Other. If need be it could always bully the latter into submission.

The emergence of China as a global power marks the end of that era. We now have to deal with The Other -- in the form of China -- on increasingly equal terms.
The West has not dominated the world for 200 years with no need to understand The Other or an ability to beat the latter into submission. Does this guy forget the 20th century? The Cold War? That little entity known as the Soviet Union which the West (primarily backed by the United States) stood as a check against for over 40 years?

The West was constantly trying to understand the Soviet Union, and had different opinions on how to handle the Soviets. The West could not bully the Soviets, if anything, the Soviets tried bullying the West. The Soviet forces in terms of sheer numbers greatly out-numbered the Western forces. As an empire, the Soviet Union absorbed by force a whole slew of surrounding countries into its sphere, crushed rebellions (in its early years anyway), and funded a slew of overseas colonies. If not for the Soviet Union, there would have been no Vietnam War, or if there was, it would've been a lot different.

China, moreover, is possessed, like the West, with its own form of universalism. It long believed that it was "the land under heaven," the center of the world, superior to all other cultures. That sense of self, which has engendered a powerful self-confidence, has been persistently evident over the last 40 years, but with China's rise, it is becoming more apparent as the country's sense of achievement and restoration gains pace. Or to put it another way, when the presidents of China and the United States meet in Beijing in 2019, with the Chinese economy fast approaching the size of the American economy, we can be sure that the Chinese sense of hubris will be far stronger than in 2009.
That's provided China's economy continues at the very high growth rates, which I doubt it even is currently (it doesn't even have enough domestic demand to support itself). I also question whether China's economy can ever really surpass the Western economies (such as the U.S.'s) because of the lack of free flow of information in China. They have a state-run media and lots of censorship. I think that would infringe on the ability of their economy to have the free flow of information and ideas that we have here in the U.S. and other such economies.
AlephZero
#78
Dec5-11, 01:09 PM
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A quote from an interview in today's Financial Times from Lee McIntire, CEO of CH2M Hill, a major US civil engineering group. (Two of their current projects are construction of facilities for the London 2012 Olympics, and widening the Panama Canal.)

Infrastructure investment in the US specifically [compared with the UK and Europe] has been pretty darn slow ... especially strategic infrastructure. If you take a look at China, they've put about $1tn into infrastructure. I was just in India, and they have $1tn infrastructure plan ... What [the US] did [in the stimulus package 2 years ago] was a lot of fix-up and a lot of asphalting of roads and you see a lot of activity, but not too much strategic ... Infrastructure is the key to economic development.
I guess the ancient Romans didn't think the vandals and visigoths were good for much either, and that was probably a fair assessment, given what happened a few hundred years after the Roman empire collapsed. But that didn't stop the empire from collapsing.
mheslep
#79
Dec5-11, 01:50 PM
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Quote Quote by AlephZero View Post
A quote from an interview in today's Financial Times from Lee McIntire, CEO of CH2M Hill, a major US civil engineering group. (Two of their current projects are construction of facilities for the London 2012 Olympics, and widening the Panama Canal.)
A CEO of a civil engineering firm says, surprise, infrastructure development spending is the the key to economic development? How about infrastructure spending is the key to bubbles?
Ominous Ordos: Dispatch from a Chinese Ghost Town

I guess the ancient Romans didn't think the vandals and visigoths were good for much either, and that was probably a fair assessment, given what happened a few hundred years after the Roman empire collapsed. But that didn't stop the empire from collapsing.
Could the empire have collapsed from decadent overspending and borrowing?
CAC1001
#80
Dec5-11, 04:16 PM
P: 18
I would say that infrastructure spending, when done properly, is key to economic growth, but there is a difference between counting infrastructure development itself as economic growth, versus infrastructure projects that facilitate economic growth later on. For example, part of the reason the American economy boomed in the post-WWII period was because of so many infrastructure projects that had been built during the Great Depression as part of the New Deal. Once totally rural areas of the country now had roads, bridges, ports, electricity, etc...and thus were able to develop into booming economies. Eisenhower's starting the Interstate Highway System I'd imagine also contributed a huge amount to America's overall economic growth over the years.

But China right now is building a whole lot of skyscrapers, apartment buildings, and so forth, and this is counted as "GDP growth," which is very questionable. Additionally, much of it is likely of shoddy quality (Google the Shanghai garbage bridge for an example).
MarcoD
#81
Dec5-11, 06:47 PM
P: 98
Quote Quote by CAC1001 View Post
But China right now is building a whole lot of skyscrapers, apartment buildings, and so forth, and this is counted as "GDP growth," which is very questionable. Additionally, much of it is likely of shoddy quality (Google the Shanghai garbage bridge for an example).
That's what I wonder about. I am not sure, if an economy is boosted full with foreign investment, and the economy mostly saves but doesn't spend -not sure whether China hardly spends,- doesn't that mean that all assets are inflated? I.e., it's just a bubble?
mheslep
#82
Dec5-11, 07:40 PM
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Quote Quote by CAC1001 View Post
when done properly
There you go. Indeed, the important question: is China doing it properly? Is, for example, $100M/mile high speed rail LA to SF proper infrastructure given the US's amazingly cheap air transport and highway system? I say no.
widereader
#83
Dec21-11, 03:55 AM
P: 0
This is the time where Americans should be afraid of the Chinese economy. They will overtake the American economy because of the cheap labor rate in China.
jduster
#84
Jan31-12, 06:11 PM
P: 46
Quote Quote by Willowz View Post
What are the estimates when this will roughly happen? Are countries preparing for this transition?

This article prompted this question. And the recession.

One thing that makes me cringe is how in the future the blame game between Dems and Reps will grow much more heated.
Initially, and maybe for the next 20 years.

In the intermediate to long term, no.

Keep in mind that China had a huge population surge that it is containing. China's birth rate is decreasing significantly.

Essentially that mean in 40 or so years, China will have a huge population of people that are now in the work force, retired. The smaller population will take over and have the huge burden of taking care of that previous generation.
nitsuj
#85
Feb3-12, 01:55 PM
P: 1,097
Quote Quote by jduster View Post
Essentially that mean in 40 or so years, China will have a huge population of people that are now in the work force, retired. The smaller population will take over and have the huge burden of taking care of that previous generation.
Not even remotely in the same sense as in the west. Taking care of the older population in the west means exponentially increasing healthcare costs with age.
MarcoD
#86
Feb4-12, 01:45 PM
P: 98
Quote Quote by nitsuj View Post
Not even remotely in the same sense as in the west. Taking care of the older population in the west means exponentially increasing healthcare costs with age.
Like old people cost that much. I doubt the Chinese really have a tradition of sticking their elderly into nursing homes. They probably take care of them themselves and give their old their daily bowl of rice, which probably can be payed full by their elderly since Chinese normally safe lots of money.

I don't think they really have a problem. Europe might have, but worst case that means we'll need to do the same instead of providing them with these ultra-modern ultra-expensive full-care homes.
phyzguy
#87
Feb4-12, 04:35 PM
P: 2,179
Quote Quote by MarcoD View Post
Europe might have, but worst case that means we'll need to do the same instead of providing them with these ultra-modern ultra-expensive full-care homes.
I take it you haven't had the pleasure of putting one of your parents, who loved you, raised you and cared for you, in one of these homes.
MarcoD
#88
Feb4-12, 04:42 PM
P: 98
Quote Quote by phyzguy View Post
I take it you haven't had the pleasure of putting one of your parents, who loved you, raised you and cared for you, in one of these homes.
I am not against them. I meant that the demographics of Europe (aging population) might imply that that will be the end result.
MarcoD
#89
Feb4-12, 05:02 PM
P: 98
Goldman Sachs published that China will probably overtake the US in 2025, and the BRIC countries will overtake the G7 in 2050.

Given all the bonds stuff, I am wondering whether the Chinese are manipulating the currency, btw. It's easy to cause a credit crunch/deflation by just not buying bonds.

Fortunately, it also has an easy solution. So, whatever. I wonder how interesting life is at the US's and EU's central banks.
jduster
#90
Feb4-12, 06:12 PM
P: 46
Quote Quote by nitsuj View Post
Not even remotely in the same sense as in the west. Taking care of the older population in the west means exponentially increasing healthcare costs with age.
Even worse than the west.

Putting it into scale.

Imagine 120 people taking care of 100 people.

Then imagine 100 people taking care of 150 people.

Big difference.


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