End of the "Age of America"

[Gregg]

The IMF predicts that China's economy will overtake the US in some ways in 2016. There is lots of room for debate about how the figures are interpreted (some of the debate even takes place in the article). With a billion more consumers than the US has I see it as inevitable that the Chinese economy will grow to be larger than the US, at least in terms of GDP. The question is what the effect will be in either country or in the rest of the world.


http://www.cnn.com/2011/BUSINESS/04/...ex.html?hpt=C2

[jp1]

I'd imagine the eventual effect will be that China's own middle class will be able to afford much of the goods that are now sold to the US consumer. Once that point is reached it will no longer be necessary for the Chinese gov't to pursue a policy of keeping the Yuan's value tied to the dollar to preserve the value of their US Treasury holdings. For years now they've been pursuing a strategy of buying tangible commodities. At some point they'll likely come to the conclusion that they can cut their losses on their paper dollar holdings because they'll be self-supporting through their growing internal economy.

[bae]

I'm curious about what happens to the environment if China tries to reach a US level of consumption...

[freein05]

I read somewhere that manufactures will look for cheaper countries to manufacture their goods. Vietnam is mentioned as one of the country that will benefit from China's prosperity. I have also read that China is already looking at methods to control the future pollution of their environment. They are looking at building high speed rail and limiting power production from cool. It is easier to have such controls in a dictatorship than a democracy.

[flowerseverywhere]

I'm curious about what happens to the environment if China tries to reach a US level of consumption...

When I went to China I was amazed at the different attitude there than other countries I had visited or lived in. Bamboo scaffolding that workers were climbing without hardhats or safety lines. Zi'an (clay soldiers) had such bad pollution you could barely breathe. Public bathrooms with pit toilets, no toilet paper or soap to wash your hands.

With the attitude I saw towards people's personal health and safety I think it is right to be concerned.

[Rogar]

I'd imagine the eventual effect will be that China's own middle class will be able to afford much of the goods that are now sold to the US consumer.

I don't think there are that many goods to go around. And like Bae says, environmental costs could be limiting to growth as well...one way or another. On a per capita basis, they atill have a long ways to go to catch up, but it's sort of a scary thought.

I suppose I can see them competing in the global market place of goods and driving the cost of things up, similar to what's happening with gas. So their quality of living goes up as they can afford more, and ours goes down as things become more expensive.

Although they seem to be aware that they cannot continue down their present path, their history of humanitarian, environmental, and quality of product integrity is not so good. So it is also a little scary how things will proceed as they expand their business influences into global economies. Per an Economist article last week on how they are buying up things in Africa, "They hope to build skyscrapers in Tokyo, run banks in London and make films in Hollywood. In Africa they can learn the ropes in a region where competition is weak. The continent—soon to be ringed with Chinese free-trade ports—is a stepping stone to a commercial presence around the globe."

Maybe at some point in their growth, radical middle eastern terrorist groups will recognize them as materialist heathens and their production strength will weaken as they have to divert big sums of money to homeland security and defense of oil sources.

[Gregg]

I'm curious about what happens to the environment if China tries to reach a US level of consumption...

I'm kind of curious about the markets for some products that we, the US, rely on pretty heavily, like oil. The US now uses more than 25% of the global supply with 4% of the population. If China were to hit our consumption levels with their current population, 20% of the world's people, that one country would consume 125% of the current production. (Way over simplified, but nonetheless illustrative.) A lot of folks who keep an eye on oil seem to think production can't get a whole lot higher than it is right now, that we're close to the peak. Something's gotta give. It's nice to think that the free markets would provide clean alternatives, but since China has the third largest coal reserves in the world it seems more likely they will just burn fossil fuels for a while longer contributing to whatever problems come with that.

[freein05]

I also wonder how Americans will handle not being the number one power economic and probably military power in the world. Like in sports we like a winner and to have our team be number 1. Actually we don't have to look far to see an example. The British Empire died not too long ago.

[jp1]

I think our empire is definitely going to end. The cost of it, paid for on borrowed money, simply isn't sustainable long-term. The question is whether we go out in a blaze of glory that ends badly or in a relatively calm scaling back. Unfortunately if I had to place a bet on which option I'd guess the first one.

[ApatheticNoMore]

China's environmental impact: well you can't imitate U.S. consumption (with a larger population too) and not destroy the planet (I mean two U.S.es in the world would be catastrophic). However, it is not all environmental destruction in China, China now has more solar energy than the U.S. does. This shouldn't have happened, but of course the U.S. didn't invest adequately in solar (why? I don't know. Because the U.S. political system is to the point where nothing to prepare us for the long term actually gets done, at least on the national level (and the states are broke)).