We have all been watching the emergence of China as a world power economically. But if you haven't thought about how fast they are emerging, take a look at this:
This military expansion is made possible by startling economic growth. China's GDP now surpasses that of Britain or France. According to Goldman Sachs, China will overtake America around 2027 and become by far the world's biggest economy by 2050 (see chart 3). Even now, it is helping to prop up the weak American dollar by buying large chunks of American debt. China is pushing America aside as the world's biggest exporter, and last year it produced more cars than the United States. Europe, too, poses challenges to America: London is vying to replace New York as the most important financial centre, and the euro has displaced the dollar as the main currency of the international bond market. [More]We don't do well accepting a role as #2. And while I could imagine China overtaking America, I thought it would be much farther into the future.
Still, what does that mean for those who follow? I think it implies a different approach to business and policy both. To grow that fast China will have to invest more in China and less in the US. Our debt will be our problem. Consider the last sentence in that quote. America could become another nation among nations - not the dominant superpower.
We'll adjust, I think.
I have learned much from m friends in Denmark, but the best lesson has been you don't have to be the king to live well and wisely.
2 comments:
I'm old enough to remember similar projections in the 1950's which had the USSR surpassing the U.S.
Rapid rates of growth aren't sustainable, just think back to when you were a teenage boy.
Good point, Bill. In my college days, it was Japan that was going to pass us by.
Still I think China could be the real deal. More importantly Goldman Sachs thinks so too.
Post a Comment