Spuddy asked:
I have heard many people predict that by such and such date in the near future, China will surpass the US as the world’s economic super power. However, China exports heavily to the US, so if the American economy is unable to buy Chinese exports, how on earth can China grow economically?
Ashley
I have heard many people predict that by such and such date in the near future, China will surpass the US as the world’s economic super power. However, China exports heavily to the US, so if the American economy is unable to buy Chinese exports, how on earth can China grow economically?
Ashley
Because they export to everywhere else, too. Not to mention, the US government owes millions in loans to China
Comment by Erick P — February 22, 2008 @ 9:21 pm
This is actually a great question. While it’s true that the U.S. accounts for China’s greatest single importer of their products (about 21%| check bls.gov) it is not their only market. And in truth, China or India could surpass the US economically, but it is not because of exports.
It really comes down to their population. Each having over 1 billion in pop (cia.gov) means that if they are allowed to create enough individual wealth amongst their citizens, and in turn through entrepreneurship create a sustainable internal work force (not unlike the US or England) their wealth would vastly exceed any western power.
Though, they do have a lot of hurdles. In China, they have EGZ (economic growth zones) where there and only there are businesses and foreign direct investment is allowed. Other areas remain undeveloped, and they do not generally allow migration of people within their country -except with certain special cases. This is a HUGE foothill on their way to achieving such a status- keep in mind that they are still an emerging market and in truth
those predictions about china make up in emotional pleas what they lack in substance. it is not so clear nor so apparent that china will necessarily make the extension to the highest economic power- and they are not, what people would have called in the 80’s, a ‘first world country’ yet.
India has different hurdles, while they have amassed huge gov incentives for information tech they too have a HUGE poor class AND a caste system that still reigns in that country.
Also, from what I understand, their new possible leader is a woman from a royal family that doesn;t believe in property rights and thinks karl marx the answer to their nation’s problems [as apposed to adam smith]– this would be a step backward for them.
Both these countries have had immense growth while moving away from marxism and toward socialistic-democratic statehood. but the future is never as clear as the people who claim to know it insists.
Comment by axesenzon — February 23, 2008 @ 3:46 am
China is able to produce products for a fraction of the labor costs as the US so when there products hit the shelves they are cheaper than ours. They have even stooped as low as to try to slip numerous products into our country with lead based paint. More than likely children are applying this paint.
The real concern in the long term is that China does not try to catch up with our technology but rather steal it instead. Satellite technology, missile technology, aircraft technology and the aerospace industry across the board.
Comment by bushbeast46 — February 26, 2008 @ 9:28 am
They are currently the third-largest export market in the world, and Europe and Africa also trade heavily with them. China is also notable for the amount of money it loaned to the US recently to help it escape the financial crisis. America is in debt to China, and China is currently growing at a rate of 7.5% per year in real GDP. It is estimated that they could take over the US by 2020.
Comment by Mr Economist — February 29, 2008 @ 5:10 pm
chinese economic growth is purely from population, nothing else. they have no technical prowess, the chinese military/space program has made in russia all over it.
Comment by Keith Wattson — March 1, 2008 @ 1:27 pm
Well, the fact is thank God for the first time China is in more trouble then we are, and they will be lucky to not be deposed by their people. China in 1 years has gone from 7% growth to 22% decline in GDP, their exports are down 11%, their unemployment rate is 17%, they shut down the nations largest factory, and according to my friend in China says “this period of civil unrest is worst then 1989.” China is out of credit, and they are printing money causing hyper inflation that has wiped many companies earnings, and Beijing is having trouble with some Army Generals in southern provinces who are refusing orders to take some police action measures cause the Chinese government is arguing over military pay adjustment over inflation.
The united states only had a 1% drop in growth is a single quarter, and that adds to 1/4% of GDP compared to China’s 22% loss in GDP or Europe’s 311% drop in GDP down a third of its economy with 37% unemployment in certain countries such as Germany & Poland.
China is also taking the desperate measure of selling their stockpiled raw materials to pay their troops, and this is starting effect commodity prices. The price of Copper was $17 cause of their stockpile, and after they started selling it has now gone down to $1.30.
Low commodity prices make a more fair trade environment for the United States cause we only use 2% of our mining potential, and the cheap commodity prices only bring the labor price as a factor. The current low inflation rate will allow us to print $2.5 trillion dollars with out inflation.
Comment by Steve qa — March 4, 2008 @ 2:05 am
It is overblown on this subject. Predictions on economy is not reliable
Comment by Dyana L — March 6, 2008 @ 8:09 pm