Friday, August 26, 2011

Why China Will Be The Dominant Economic Power by 2030

link here to article

This article from Foreign Affairs makes the case for Chinese economic dominance by 2030. The US economy is projected to grow at 2.5% and China will grow at 7% for the next 20 years. With a 7% growth rate China's economy will double every 10 years.

Some in the US believe that it can overcome any threat to its economic dominance because it has always done this in the past. It was threatened by Japan in the 1980's and it created the new technologies that restored its dominance. This time, however, it might be different. The US is much weaker than it was in the late 1980's. The government is holding over $1 trillion of toxic assets, and its banking system is still weak from the bad loans that it made in the financial crisis. It is also the worlds largest debtor nation, and China is the world's largest creditor nation. The US is also struggling with high unemployment, rising income inequality and low social mobility. It no longer projects the economic model for the rest of the world. Its unfunded healthcare liabilities will also be a problem by 2021 due to unfavorable demographics. China has its problems as well, but its status as the world's creditor nation has made many countries dependent upon it for financial help.
It also graduates twice the number of students who majored in science or engineering as the US. It is capable today of manufacturing any of the high technology products that are currently on the world market, and the number of citations to its published scientific research is growing rapidly.

This article did not get into the problems with the US political system, but it is broken badly, and it will not be easy to overcome its numerous problems. Anyone in China, or elsewhere in the world, who pays any attention to the quality of the major candidates for the GOP nomination for the US presidency in 2012 must be shaking their heads in disbelief. Their success in attracting supporters among the electorate is also disturbing. A large segment of the US population has no respect for science, rational discourse or for the positive role that government can play in the economy. They are ignorant of US history, and seek to restore the country to the fantasy history that is fed to them by their exploiters who benefit from their ignorance. If the US political system continues in this direction it will accelerate China's rise to economic dominance.

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