Chinese Economy -The Emerging of a Super power ?-

[Ahovking]

China is the world's fastest-growing major economy, with an average growth rate of 10% for the past 30 years. China is also the second largest trading nation in the world and the largest exporter and second largest importer of goods. And With an 2010 estimate of 1,338,612,968 and being classed as an Developing country with Meany regions in poverty China hold massive potential

My First Question: is Will China ever overtake the us and the number one largest importer of goods.

My Second Question: If China Does over takes the use in importer what would that mean for the Usa.

 

[Lord of Elves]

Answer to your first question: Yes. With the state of our economy, body politic, and expectations for national leadership, Chinese dominance seems preeminent unless something significant changes.

Answer to your second question: I envision something similar to post-Second World War Britain, should the aforementioned come to pass.

 

[JohnRM]

China is the world's fastest-growing major economy, with an average growth rate of 10% for the past 30 years. China is also the second largest trading nation in the world and the largest exporter and second largest importer of goods. And With an 2010 estimate of 1,338,612,968 and being classed as an Developing country with Meany regions in poverty China hold massive potential

My First Question: is Will China ever overtake the us and the number one largest importer of goods.

My Second Question: If China Does over takes the use in importer what would that mean for the Usa.

First answer: No. At least not for a very long time.

Second answer: It would mean that SOMEONE has to be exporting to them. The United States & Europe are the only likely contenders to adequately supply China with enough goods to take over that mantle. It would be extremely meaningful for both, in a good way.

 

[dwaxe]

1. Maybe. The long term effects of their one-child policy remain to be seen.

2. Chinese Lingua Franca score increases slightly.

 

[Theige]

China is the world's fastest-growing major economy, with an average growth rate of 10% for the past 30 years. China is also the second largest trading nation in the world and the largest exporter and second largest importer of goods. And With an 2010 estimate of 1,338,612,968 and being classed as an Developing country with Meany regions in poverty China hold massive potential

My First Question: is Will China ever overtake the us and the number one largest importer of goods.

My Second Question: If China Does over takes the use in importer what would that mean for the Usa.

If China's economic growth continues at the rate it has been growing, it will certainly overtake the USA in imports at some point.

It doesn't really mean all that much for the USA. Possibly stronger exports, and a more even trade balance, especially if the Yuan appreciates, which it should.

Answer to your first question: Yes. With the state of our economy, body politic, and expectations for national leadership, Chinese dominance seems preeminent unless something significant changes.

Answer to your second question: I envision something similar to post-Second World War Britain, should the aforementioned come to pass.

I see no reason why China will "dominate." They're learning our language, our ways, not the other way around. They are still an incredibly poor nation per capita, and with their emerging middle class, you can probably expect Chinese society to begin demanding significant changes to their government.

To your second point; an obvious difference being China doesn't seem to have any plans to build a military that rivals that of the USA, and American military power went a long way in defining the post-war relationship. Not to mention our economy completely dwarfed all other world powers.

First answer: No. At least not for a very long time.

Second answer: It would mean that SOMEONE has to be exporting to them. The United States & Europe are the only likely contenders to adequately supply China with enough goods to take over that mantle. It would be extremely meaningful for both, in a good way.

That is not necessarily the case at all. Any number of nations/regions could benefit from increases in Chinese imports/consumption.

 

[schlaufuchs]

Ummm...I thought the argument was that due to convergence we're going to see a tailing off of that massive growth.

 

[Integral]

I don't think imports is the right metric here - GDP per capita might be more appropriate.

@Owen: That is correct. At some point diminishing returns should set in. A really quick back-of-the-envelope calculation shows that steady-state Chinese GDP/capita should be about 3/4ths of that of the US in the long-run steady state, conditional on them keeping their savings rate as high as it is currently [1]. We have a loooong way to go before that happens, of course. It's possible that China could keep up this kind of stellar growth for some time yet.


[1] Solow model, Mankiw, Romer, and Weil (1992) formulation, with googled values for savings rates, education expenditures, and population growth plugged in.

 

[Stapel]

At some point, Chinese economy will surpass American economy, I guess.

And that is a very very good thing for American and other economies!

 

[Lillefix]

Probably yes. But you have to wonder if lack of democracy in such a globalised world, their extreme environmental problems and the inevitable slowing down of the economy will make the coutry crash completely before it surpasses the US.

 

[GenMarshall]

I sense a second cold war to be brewing between the Commie Chinese and the Capitalist Americans.

But USA will always be #1!!

 

[Tani Coyote]

I sense a second cold war to be brewing between the Commie Chinese and the Capitalist Americans.

I won't correct you on the whole "China's not communist!!!" thing since others will, but any cold war will be for rhetorical purposes; we're too dependent on eachother. China will become Europe 2.0 - we may slap eachother all the time, but we'd never engage in a full out brawl. Except if the victim of the brawl was a third party.

---

My First Question: is Will China ever overtake the us and the number one largest importer of goods.

Quite possibly; it depends on how the demographics and economic growth work. It's hard to make predictions, especially when financing gets involved.

My Second Question: If China Does over takes the use in importer what would that mean for the Usa.

Not much. We'd still be a major market, even if second or third(if the EU is thrown in). China would see more appreciation in terms of influence and prestige, but as has been said, it's not a case of the US declining so much as others getting closer.

---

On the topic in general, one could make the argument that the "superpower" system is obsolete. During the Cold War, two camps were so heavily dependent on one nation the term had value. Nowadays, everything is so interconnected it has far less merit than before: Europe isn't a wartorn disaster that needs US assistance or else hordes of soldiers will pour over their borders, to name an example.

Interdependence has made the "superpower" label far less meaningful; it used to be a case of total dominance, now it's a case of who dominates what. The EU will steadily rise to soft power dominance, we'll likely maintain our military dominance for a while, and China will likely retain production dominance. We all have our strengths/weaknesses now, whereas originally it was all strength.

China may rival us, but they'd never attack us. Not only is there MAD, but there's MAD 2.0 - Mutually-Assured Depression. We need their cheap goods and they need our money that we spend on those cheap goods.

 

[Joecoolyo]

In the 1980's, they said Japan was supposed to overtake our economy by now.

As far as I know they didn't.

China won't overtake our economy, they'll hit a brick wall somewhere.

 

[Perfection]

Well there are like 10x the people in China than Japan, that's kinda important.

 

[warpus]

China is an exporting nation, I don't see them starting to import crap on a large scale anytime soon. They have a huge manufacturing infrastructure, mainly there so that we can have cheap sneakers - they can produce whatever they need right there at home, especially sneakers.

 

[Azale]

Well there are like 10x the people in China than Japan, that's kinda important.

And 10x the problems to go with it

 

[Theige]

On the topic in general, one could make the argument that the "superpower" system is obsolete. During the Cold War, two camps were so heavily dependent on one nation the term had value. Nowadays, everything is so interconnected it has far less merit than before: Europe isn't a wartorn disaster that needs US assistance or else hordes of soldiers will pour over their borders, to name an example.

Interdependence has made the "superpower" label far less meaningful; it used to be a case of total dominance, now it's a case of who dominates what. The EU will steadily rise to soft power dominance, we'll likely maintain our military dominance for a while, and China will likely retain production dominance. We all have our strengths/weaknesses now, whereas originally it was all strength.

China may rival us, but they'd never attack us. Not only is there MAD, but there's MAD 2.0 - Mutually-Assured Depression. We need their cheap goods and they need our money that we spend on those cheap goods.

Maybe if you're speaking in economic terms only, in which case you're kind of right; the U.S. economy is still 60% larger than China's in PPP terms, and almost 3x as large in Nominal terms.

Militarily thought, the "Superpower" label applies more now than almost ever, with the exception possibly being the early 90's, immediately following the collapse of the USSR.

China is an exporting nation, I don't see them starting to import crap on a large scale anytime soon. They have a huge manufacturing infrastructure, mainly there so that we can have cheap sneakers - they can produce whatever they need right there at home, especially sneakers.

China is the 2nd largest importer in the world, though they imported roughly 60% less than the United States in 2009.

 

[warpus]

I stand corrected!

 

[Xanikk999]

When China has the capability to provide a decent standard of living for the majority of their citizens then i'll be worried about them becoming a superpower.

Their economy is only strong because of the sheer number of people living in China. The average Chinese worker does not make nearly as much as most developing countries. Their economy is largely manufacturing still rather then service based.

 

[El_Machinae]

Well, all else being equal, China should achieve some type of convergence with the rest of developing and developed nations. That said, a great deal of our infrastructure was created using cheap energy, and if there's no long-term trend towards cheaper energy, then China might never catch up. We'll forever be richer, because we have assets that were created more cheaply, and all new asset creation is benefited by earlier infrastructure.

 

[Theige]

Well, all else being equal, China should achieve some type of convergence with the rest of developing and developed nations. That said, a great deal of our infrastructure was created using cheap energy, and if there's no long-term trend towards cheaper energy, then China might never catch up. We'll forever be richer, because we have assets that were created more cheaply, and all new asset creation is benefited by earlier infrastructure.

When you say "richer" I assume you mean GDP/capita?

I think it is safe to say China will never become richer than the US per capita, the planet simply doesn't have the resources necessary for that type of income/capita to be established for 1.3 billion people. Barring of course a complete collapse in the US, civil war, nuclear holocaust, etc.

But in absolute GDP numbers, China's overall economy definitely has a good chance of overtaking the U.S.