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

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The discussion centers on the future economic landscape, particularly regarding the potential for China to surpass the United States in GDP. Participants express skepticism about this transition, citing the significant disparity in per capita GDP and the challenges China faces, including demographic issues, corruption, and the sustainability of its growth model. Concerns are raised about the implications of a larger Chinese economy, particularly regarding military funding and global influence. The conversation also touches on the historical context of economic dominance, comparing the current situation to past shifts in global power dynamics. Many argue that while China may grow in total GDP, its ability to innovate and create leading consumer products remains questionable. Additionally, the impact of the U.S. manufacturing decline and the role of small businesses in job creation are discussed, emphasizing the need for a balanced economy that supports both high-paying tech jobs and a robust manufacturing base. Overall, there is a consensus that the transition to a new economic order is complex and fraught with uncertainties.
  • #61
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.
 
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  • #62
Passionflower said:
I know many young people who are learning Mandarin instead of for instance French or German.

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.
 
  • #63
Passionflower said:
Chinese culture is pins of chairman Mao and quilted vests? Ignorance is bliss.

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. (:smile: 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.
 
  • #65
MarcoD said:
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?

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.
 
  • #66
CAC1001 said:
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.

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.
 
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  • #67
MarcoD said:
I don't think the west forced them open. .

I think CAC1001 meant Opium Wars.
 
  • #68
vici10 said:
I think CAC1001 meant Opium Wars.
What? In what way?
 
  • #69
Before Opium wars China was more or less insular country. There was trade, but Chinese putted high tariff on foreign goods.

Opium wars was an attempt of British to open China for their markets.

For example:

The British demands included opening all of China to British merchants, legalising the opium trade, exempting foreign imports from internal transit duties, suppression of piracy, regulation of the coolie trade, permission for a British ambassador to reside in Beijing and for the English-language version of all treaties to take precedence over the Chinese.

The Qing Dynasty court rejected the demands from Britain, France, and the US.
http://en.wikipedia.org/wiki/Second_Opium_War

The defeat of China in these wars opened China for western merchants. Also this defeat forced chinese to think about modernization and protection against future attacks.
 
  • #70
The real turning point was in the late 1970's.

Why Is China Growing So Fast?
In 1978, after years of state control of all productive assets, the government of China embarked on a major program of economic reform. In an effort to awaken a dormant economic giant, it encouraged the formation of rural enterprises and private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce. By nearly all accounts, the strategy has worked spectacularly.
Continued...

http://www.imf.org/external/pubs/ft/issues8/index.htm
 
  • #71
I met with a good friend of mine this evening, formerly a trader with Smith-Barney, currently an investments broker, who stated unequivocally that "China's days are numbered" as a contender against the U.S., economically. He claims the reason rests on China's rise due to it's inexpensive labor, but natural market forces are causing such a rise there that it's competitive edge has been largely undermined.
 
  • #72
DoggerDan said:
I met with a good friend of mine this evening, formerly a trader with Smith-Barney, currently an investments broker, who stated unequivocally that "China's days are numbered" as a contender against the U.S., economically. He claims the reason rests on China's rise due to it's inexpensive labor, but natural market forces are causing such a rise there that it's competitive edge has been largely undermined.

Personally, I think China's days will be numbered the moment the rest of the world notices that their investments don't pay off. Chinese are good traders, heck they own Indonesia, but I just don't believe that with the current social/political structure in place, foreign investors will get any good ROI.
 
  • #73
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.
 
  • #74
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.
 
  • #76
cbetanco said:
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.
 
  • #77
shashankac655 said:

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 into 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.

:confused: 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.
 
  • #78
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.
 
  • #79
AlephZero said:
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?
 
  • #80
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).
 
  • #81
CAC1001 said:
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?
 
  • #82
CAC1001 said:
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.
 
  • #83
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.
 
  • #84
Willowz said:
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.
 
  • #85
jduster said:
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.
 
  • #86
nitsuj said:
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.
 
  • #87
MarcoD said:
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.
 
  • #88
phyzguy said:
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.
 
  • #89
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.
 
  • #90
nitsuj said:
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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