When will China overtake the U.S, economically?

  • News
  • Thread starter Willowz
  • Start date
  • Tags
    China
In summary, the conversation centered around the topic of economic dominance and the potential decline of the United States. The contributors discussed various factors such as GDP calculations, the impact of manufacturing decline, and the role of war in the economy. Some expressed concerns about the reliance on the finance and military industries, while others argued that these industries have played a crucial role in the country's success. The conversation also touched on the importance of job creation and the role of intellectual property in manufacturing and innovation. There were differing opinions on the current state of the US economy and what steps should be taken to ensure its success in the future.
  • #1
Willowz
197
1
What are the estimates when this will roughly happen? Are countries preparing for this transition?

http://www.bloomberg.com/news/2011-09-06/osama-bin-laden-fulfilled-his-one-true-ambition-noah-feldman.html" [Broken] 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.
 
Last edited by a moderator:
Physics news on Phys.org
  • #2
On a side note, I am in Shanghai right now and even in china's most modern city the disparity is striking. At the center of the city it's a common occurance to see a sidewalk full of poor peasents wheeling a wooden cart with fruits right outside a sparkling Ferarri show room.
 
Last edited:
  • #3
Willowz said:
What are the estimates when this will roughly happen? Are countries preparing for this transition?

http://www.bloomberg.com/news/2011-09-06/osama-bin-laden-fulfilled-his-one-true-ambition-noah-feldman.html" [Broken] 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.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal [Broken])

That has 3 different GDP by country calculations - the US still has 3x the GDP (~$15T US - ~$5T China), not to mention a higher per person GDP. Purchasing Power Pairity is a little closer (~$15T and ~$10T), but still the US has a sizably larger economy.

While it looks like no end is sight right now, I don't feel that the US will lose it's top spot in economic dominance in my life time without another 9/11-type 'game changing' event.
 
Last edited by a moderator:
  • #4
mege said:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal [Broken])

That has 3 different GDP by country calculations - the US still has 3x the GDP (~$15T US - ~$5T China), not to mention a higher per person GDP. Purchasing Power Pairity is a little closer (~$15T and ~$10T), but still the US has a sizably larger economy.

While it looks like no end is sight right now, I don't feel that the US will lose it's top spot in economic dominance in my life time without another 9/11-type 'game changing' event.

I'd be very interested in getting a detailed output that lists the contributions of GDP by industry and function.

You guys in the states have had your manufacturing base almost completely wiped out (sadly this is happening in a way in Australia, but not in the same magnitude, although I can see it happening like yours in the near future).

With all your manufacturing gone, I really wonder what portion of the GDP figures are tied to finance and the military industrial complex. If weapons creation was counted in the figures (and was significant), then I think it would be handy to know since historically the business of war is always a losing one.
 
Last edited by a moderator:
  • #5
chiro said:
I'd be very interested in getting a detailed output that lists the contributions of GDP by industry and function.

You guys in the states have had your manufacturing base almost completely wiped out (sadly this is happening in a way in Australia, but not in the same magnitude, although I can see it happening like yours in the near future).

With all your manufacturing gone, I really wonder what portion of the GDP figures are tied to finance and the military industrial complex. If weapons creation was counted in the figures (and was significant), then I think it would be handy to know since historically the business of war is always a losing one.

To the statement in bold: why is that? It saved our bacon from the great depression.

The tricky part regarding manufacturing: as a workforce becomes more skilled, is there room for low-skill jobs? The competitive advantage is clearly elsewhere. This has an impact on my discussion above, because if it wasn't for the assembly lines which existed for other products, the US may not have been as successful during WWII to start up the war machine. So it's a balancing act of moving away from a low/semi-skilled workforce and move towards a high skill work force without jeopardizing that potential in case of emergency.

IMO before we can go towards a 'better society' (whatever that means), we need to have the proper jobs to support it. If the manufacturing industry was growing faster than the tech industry in the US, I would be a bit scared - as a country I think we'd rather have the higher paying tech jobs than low paying mfg jobs. When some industrys grow, others shrink neccessarilly.
 
  • #6
mege said:
To the statement in bold: why is that? It saved our bacon from the great depression.

Because an investment in war is not like an investment in something like infrastructure or similar development.

You make bombs, you blow people and buildings up, the bombs are gone and people die. The bomb doesn't have the longevity or even any parallel use that a new road, building, or other infrastructure project like a factory or some other related project does.

There are other reasons why this is a bad thing but they aren't purely economic.

As for manufacturing, this is not purely a low/semi-skilled area. Manufacturing and particularly innovation has a strong link with intellectual property. If you look at what is happening in China, they want this piece of the pie from the US. They say "We will manufacture your goods for you at cheap labor, but we want to have your intellectual property", and you are giving it to them. They are now becoming a powerhouse for research and innovation and now that rug is being pulled from under your feet.

In terms of having jobs, the best way for a country to do that is to allow anyone to be able to create their own job or business. In this model, anyone who has a good business succeeds and the one who does not fails. This is not the case in the US anymore. Certain people get favorable treatment, and others get shafted severely.

Also you need to look at how the whole system of credit is managed. It's very hard under the current system for people to build something from scratch and make it on their own. It's a lot easier for the big players to get bigger, and in contrast it becomes really hard for the people down the bottom.

The thing is that most of the jobs out there are not in General Electric or Microsoft, they are in your local restaurants, or clothes shops, or corner stores, and other kinds of small to medium businesses.

Due to the fact that credit is a really hard thing to get hold of, businesses will go out of business simply because they do not have the credit that they need. If you really want to build a nation that gets people jobs, you have to start by looking at the current credit system and make some significant changes to that.

Also with regard to your thinking about low paying and high paying tech jobs, this is the thinking that is destroying your middle class. The thinking was to send all the menial jobs to places where the labor is cheap and the skillset required is low enough so that pretty much anybody could do it. The simple idea was that you make it over there and then ship it back and bag the difference.

But this has a domino effect. The people that were employed are now unemployed. Your country becomes a service economy more so than a manufacturing economy. So you have to buy more and more stuff from elsewhere. Meanwhile places like China are getting the infrastructure from other companies for free, taking the IP, building their own domestic economy, and getting bigger and bigger. Your middle class gets wiped out, and the disparity between the rich and poor gets wider.

Add to the fact that as a result more people are forced to get into debt for whatever reason be it education, or just to get through the week for groceries and electricity bills, and you have a very serious problem.

If you still want to think that war is profitable, maybe you should look at your current debt and how much your military system spends on the wars you are fighting right now.
 
  • #7
Willowz said:
What are the estimates when this will roughly happen? Are countries preparing for this transition?

On Dutch radio the prediction was between 2030 (very unlikely) and 2050 (with normal trends.)
 
  • #8
There are "normal trends"?
 
  • #9
Newai said:
There are "normal trends"?

I guess they assume certain growth percentages for both nations and extrapolate from that.
 
  • #10
About 6 months ago I heard some talking head say China would overtake the US by 2020 and that India wouild overtake China by 2030. Just a rumor.
 
  • #11
I'll consider China and India to be real players when they start creating Microsofts and General Electrics and IBMs.

http://money.cnn.com/magazines/fortune/global500/2011/countries/China.html

If you discount energy companies (which obviously would be massive in China/India), China doesn't even have a top 50 company in the world in revenue. Expand to the top 500 and they do have a lot of big companies, but I don't see the world looking at them as "the economy" unless we see a real modernization of that nations economy (which may very well happen) and move away from these companies who are big only because of the sheer number of people they serve.

India, on the other hand, I think will never be a contender at this rate. They have 8 in the top 500 and they're almost all energy.
 
  • #12
Willowz said:
Are countries preparing for this transition?
What transition? Other than a ranking on a particular statistical table, what do you think will happen?
 
  • #13
China has little chance of surpassing the US per capita GDP in this century.
 
  • #14
russ_watters said:
What transition? Other than a ranking on a particular statistical table, what do you think will happen?
Well for starters changing the global currency.
 
  • #15
mheslep said:
China has little chance of surpassing the US per capita GDP in this century.
Yeah but that's like comparing apples with oranges.
 
  • #16
Willowz said:
Yeah but that's like comparing apples with oranges.
No, apples with apples. Comparing 1.2 billion people to 300 million people collectively is the apples to oranges comparison.
 
  • #17
mheslep said:
No, apples with apples. Comparing 1.2 billion people to 300 million people collectively is the apples to oranges comparison.
The point you made doesn't take under consideration that fact. So, why point it out?
 
  • #18
Willowz said:
Well for starters changing the global currency.
I highly doubt that China overtaking the US in total gdp would prompt other countries to change their reserve currency. There are more important factors in the choice than total gdp.
 
  • #19
Willowz said:
The point you made doesn't take under consideration that fact. So, why point it out?
My point is that per capita statistics make total population details go away. For GDP total, raised in your OP, population is a driver. So comparing the US to, say, Norway (5M) is not useful for many purposes.
 
  • #20
russ_watters said:
I highly doubt that China overtaking the US in total gdp would prompt other countries to change their reserve currency. There are more important factors in the choice than total gdp.
So, what I'm getting from what you're saying regarding China overtaking the U.S economically is, "so what?".
 
  • #21
mheslep said:
My point is that per capita statistics make total population details go away. For GDP total, raised in your OP, population is a driver. So comparing the US to, say, Norway is not useful for many purposes.
So, the U.S from the get-go couldn't compete with China economically-once China got on it's feet?
 
  • #22
The US competes well with China now, having an overwhelming http://en.wikipedia.org/wiki/Comparative_advantage" [Broken] in many areas like software high tech (Google, Apple) and finance, and not in others like industries dominated by simply labor costs.

Another consideration for the future that reflects a population dependency, suppose China breaks up into 4-5 countries some decades hence.
 
Last edited by a moderator:
  • #23
Willowz said:
So, what I'm getting from what you're saying regarding China overtaking the U.S economically is, "so what?".
Precisely. You asked "what changes..." based on the assumption that there would be changes. I'm saying (as are others) that that premise is faulty.
 
  • #24
Willowz said:
So, the U.S from the get-go couldn't compete with China economically-once China got on it's feet?
You still seem to have it backwards: "getting on its feet" means having a comparable per capita gdp. This "get-go" is 100 years away!
 
  • #25
russ_watters said:
You still seem to have it backwards: "getting on its feet" means having a comparable per capita gdp. This "get-go" is 100 years away!

This implies a point in time where China would be a bigger economy than the US and EU combined. That's also valid, but I guess most people in the US are interested in the point in time where China overtakes the US as an economic superpower, also breaking the US's perceived hegemony on the world, and that point is much nearer.
 
Last edited by a moderator:
  • #26
MarcoD said:
... I guess most people in the US are interested in the point in time where China overtakes the US as an economic superpower, also breaking the US's perceived hegemony on the world...
Neither of us speak for "most people", but in this thread you are interested in that point because you believe those implications necessarily follow from it, while pretty much everyone else in the thread is trying to explain to you why your belief is wrong.
 
  • #27
This wiki page shows that several countries already have higher per capita GDP than the US.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita" [Broken]

I don't know what impact that has had on the US. Considering that Luxembourg is high up there, I would guess none whatever. However, when the GDP of China surpasses that of the US, it will be a different kind of event. Apples and oranges different. I have no clue what the political and economic implications will be. At some point the US surpassed some other country (perhaps England) to become the largest economy. What was the effect on that country?
 
Last edited by a moderator:
  • #28
For that matter the http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)" [Broken] is 1-4% larger than the US, but I am unaware of any serious threat of the Euro becoming the world's reserve currency. Maybe the Swiss Franc has a shot though. :frown:
 
Last edited by a moderator:
  • #29
Duh. :rolleyes: This was my second post in this thread. I don't think anybody was talking to me, at this point in time, except for you. And of course there will be a change in balance of power in the world. If China would be bigger than the US and EU combined, most nations in the world would, pragmatically, take a bigger interest and sometimes have little choice in following its judgements.
 
  • #30
Jimmy Snyder said:
This wiki page shows that several countries already have higher per capita GDP than the US.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita" [Broken]

I don't know what impact that has had on the US. Considering that Luxembourg is high up there, I would guess none whatever. However, when the GDP of China surpasses that of the US, it will be a different kind of event. Apples and oranges different. I have no clue what the political and economic implications will be. At some point the US surpassed some other country (perhaps England) to become the largest economy. What was the effect on that country?
The UK's relative influence diminished after WW1 and 2 because of its precarious financial situation after those wars and not the relative size of economies per se. The issue had a practical realization in the Suez Crises, whenhttp://en.wikipedia.org/wiki/Suez_Crisis#Financial_pressure" That I would think, financial soundness and not size, is the lesson to take from the episode.
 
Last edited by a moderator:
  • #31
mheslep said:
For that matter the http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)" [Broken] is 1-4% larger than the US, but I am unaware of any serious threat of the Euro becoming the world's reserve currency. Maybe the Swiss Franc has a shot though. :frown:

The Swiss will never want that. There are benefits to being the world's reserve currency but also disadvantages, especially for small countries (bad for export, tourism, local economy, defining one's own monetary policy). At the moment, the Swiss are only trying to have the Franc devaluated against other currencies. I guess it's roughly the same reason why the Chinese don't push forward towards strengthening the Renminbi.
 
Last edited by a moderator:
  • #32
MarcoD said:
The Swiss will never want that. There are benefits to being the world's reserve currency but also disadvantages, especially for small countries (bad for export, tourism, local economy, defining one's own monetary policy). At the moment, the Swiss are only trying to have the Franc devaluated against other currencies. I guess it's roughly the same reason why the Chinese don't push forward towards strengthening the Renminbi.
My earlier post was for fun, but valuation does not necessarily the reserve currency make, obviously.
 
  • #33
i think china has a couple of entry points to establishing itself as a world power. one is africa, where china needs raw materials. in this respect, africa is a prime colonial opportunity. the trick is for china to set itself up as the primary product and services provider for its raw materials countries. then it's a short jump to paying them in yuan so that they can turn around and buy chinese products in that same currency. china would also want to establish banks in these countries to facilitate the transactions. they would probably be so good at it that they could bank in the nations' local currencies.

the other opportunity is the economic development zones that will be popping up around the caspian region, the TAPI pipeline in particular. maybe even china would find that some items could be manufactured cheaper in afghanistan and start becoming a bit more like the US?

not sure if china has its fingers in south america, but it wouldn't surprise me.
 
  • #34
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.
 
  • #35
This is a Chinese view of the current world ranking, and it puts them down at 6th with a long way to go yet.

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

And...

http://www.fgu.edu.tw/~academic/up1/malayconference1/paperscollection.files/conferefncepapers/chang.pdf [Broken]
 
Last edited by a moderator:
<h2>1. When is China expected to overtake the U.S. economically?</h2><p>It is difficult to determine an exact date for when China will overtake the U.S. economically as it depends on various economic factors and policies. However, many experts predict that China could potentially overtake the U.S. within the next decade.</p><h2>2. How does China's economic growth compare to the U.S.?</h2><p>China has experienced rapid economic growth in recent years, with an average annual GDP growth rate of around 6-7%. In comparison, the U.S. has a more stable but slower growth rate of around 2-3% annually.</p><h2>3. What are the main factors driving China's economic growth?</h2><p>China's economic growth is primarily driven by its large population, strong manufacturing industry, and government policies aimed at promoting economic development. Additionally, China has been investing heavily in infrastructure and technology, which has contributed to its economic growth.</p><h2>4. Will China's economic growth continue at the same pace?</h2><p>It is difficult to predict the exact pace of China's economic growth in the future. However, some experts believe that China's growth may slow down as it faces challenges such as an aging population and increasing debt. Others argue that China's economic growth may continue at a similar pace due to its strong economic policies and investments.</p><h2>5. How will China's economic growth impact the rest of the world?</h2><p>China's economic growth has already had a significant impact on the global economy. As it continues to grow, China's influence and economic power will likely increase, potentially leading to shifts in global trade and politics. Additionally, China's economic growth may also create new opportunities and challenges for other countries, particularly in terms of competition and cooperation.</p>

1. When is China expected to overtake the U.S. economically?

It is difficult to determine an exact date for when China will overtake the U.S. economically as it depends on various economic factors and policies. However, many experts predict that China could potentially overtake the U.S. within the next decade.

2. How does China's economic growth compare to the U.S.?

China has experienced rapid economic growth in recent years, with an average annual GDP growth rate of around 6-7%. In comparison, the U.S. has a more stable but slower growth rate of around 2-3% annually.

3. What are the main factors driving China's economic growth?

China's economic growth is primarily driven by its large population, strong manufacturing industry, and government policies aimed at promoting economic development. Additionally, China has been investing heavily in infrastructure and technology, which has contributed to its economic growth.

4. Will China's economic growth continue at the same pace?

It is difficult to predict the exact pace of China's economic growth in the future. However, some experts believe that China's growth may slow down as it faces challenges such as an aging population and increasing debt. Others argue that China's economic growth may continue at a similar pace due to its strong economic policies and investments.

5. How will China's economic growth impact the rest of the world?

China's economic growth has already had a significant impact on the global economy. As it continues to grow, China's influence and economic power will likely increase, potentially leading to shifts in global trade and politics. Additionally, China's economic growth may also create new opportunities and challenges for other countries, particularly in terms of competition and cooperation.

Similar threads

  • General Discussion
Replies
6
Views
1K
Replies
109
Views
53K
Back
Top