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News When will China overtake the U.S, economically?

  1. Sep 7, 2011 #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: May 5, 2017
  2. jcsd
  3. Sep 7, 2011 #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: Sep 7, 2011
  4. Sep 7, 2011 #3
    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: May 5, 2017
  5. Sep 8, 2011 #4

    chiro

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    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: May 5, 2017
  6. Sep 8, 2011 #5
    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.
     
  7. Sep 8, 2011 #6

    chiro

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    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.
     
  8. Sep 8, 2011 #7
    On Dutch radio the prediction was between 2030 (very unlikely) and 2050 (with normal trends.)
     
  9. Sep 8, 2011 #8
    There are "normal trends"?
     
  10. Sep 8, 2011 #9
    I guess they assume certain growth percentages for both nations and extrapolate from that.
     
  11. Sep 8, 2011 #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.
     
  12. Sep 8, 2011 #11

    Pengwuino

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    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.
     
  13. Sep 8, 2011 #12

    russ_watters

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    What transition? Other than a ranking on a particular statistical table, what do you think will happen?
     
  14. Sep 8, 2011 #13

    mheslep

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    China has little chance of surpassing the US per capita GDP in this century.
     
  15. Sep 8, 2011 #14
    Well for starters changing the global currency.
     
  16. Sep 8, 2011 #15
    Yeah but that's like comparing apples with oranges.
     
  17. Sep 8, 2011 #16

    mheslep

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    No, apples with apples. Comparing 1.2 billion people to 300 million people collectively is the apples to oranges comparison.
     
  18. Sep 8, 2011 #17
    The point you made doesn't take under consideration that fact. So, why point it out?
     
  19. Sep 8, 2011 #18

    russ_watters

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    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.
     
  20. Sep 8, 2011 #19

    mheslep

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    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.
     
  21. Sep 8, 2011 #20
    So, what I'm getting from what you're saying regarding China overtaking the U.S economically is, "so what?".
     
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