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Hawaii_Jake's avatar

What will the world be like when China has the largest economy in 2018?

Asked by Hawaii_Jake (25561 points ) March 25th, 2012

This article from the Guardian quotes the Economist as reporting China will surpass the US as the largest economy in the world in just six short years. The article also says the Chinese currency, the renminbi, will become the global currency.

What does this mean for Westerners?

What does it mean for prices at the gas pump when oil is no longer traded in US dollars?

How familiar are jellies with the rise of China as a superpower?

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13 Answers

josie's avatar

Western manufacturers, particularly Americans, have never been very good at understanding foreign consumers to whom they sell. As China’s economy surpasses the US (not a forgone conclusion unless the Chinese government reduces controls and regulations on the economy) then it will be in Westerner’s selfish interest to understand Chinese culture and speak the language. The biggest change therefore will be the number of Westerners who see fit to learn to speak Mandarin Chinese. By the way, it is not inevitible that the Chinese economy surpasses the US. It will certainly occur if the US government limits economic growth by its own attempts to control US industry and commerce.

jaytkay's avatar

it is not inevitible that the Chinese economy surpasses the US

With more than four times the population, it probably is.

josie's avatar

Not all of that population are actually consumers in a division of labor marketplace. And if the Chinese government sucks up the wealth normally exchanged in the open market (what is happening in the US) then it won’t happen. Then again, maybe they won’t and maybe it will.

Linda_Owl's avatar

Well, we are already in debt to China & China’s currency may well replace the American dollar as the world adapts to China’s markets. If this happens, I think we will be paying a great deal more per gallon for gasoline. China also owns a great deal of real estate in the US, so they may have a much broader base in the US than we currently realize. The products that China produces do not seem to be the quality that US consumers demand (at least so far), so China might have to improve the products that they are trying to sell to the US & the rest of the world (at least to the industrialized nations). I think there may be an influx of tourists from China. Some of these may be actually impressed with getting to visit the US (at least the first ones), but gradually the US may come to be viewed as less than optimum. The oriental mind-set is different from the American mind-set, at least the ordinary American mind-set….. but the oriental mind-set has a great deal in common with the 1% richest Americans (in that they think that they are ‘better’ than ordinary Americans). Actually, people from China out-pace us already in that a large percentage of them speak english as well as chinese, whereas most Americans do not even speak passable spanish/mexican & hispanic people are the largest immigrant population in the US. I think most Americans have no clue as to how life will change in America when China replaces the US as the world’s leading super-power.

CWOTUS's avatar

As I recall, it was “nearly inevitable” that the Japanese economy was going to overtake the US during the 1980s. Japanese investors and companies were buying prime real estate in the USA, the bubble of Japanese real estate had a valuation on (I think) the city of Tokyo that made it “worth more” (on paper) than the entire state of California. But it didn’t; the Japanese speculative bubble burst, and they’re still recovering from that. As strong as the Japanese economy was (and still is) it may be a long time before they are in that position again.

It may be that today’s US government debt held by China becomes their nemesis. If the US defaults on its payments, or if the dollar inflates too much, too soon, then that debt becomes worthless, and one of their biggest trading partners retrenches. (The rest of the world will follow suit, at least for a while.) That could make The Great Recession of 2008–2011 look like the good old days. There’s no telling who would come out on top when that happens: China, Japan or maybe even India. And if the US ever gets its act together again, then it could hold the top spot for another generation or so.

Personally, I would like to see the Chinese stop buying our debt, because it’s a huge risk for them and I don’t want to see them fold. Unless the US does get its financial house in order then the dollar will collapse.

wundayatta's avatar

It will be like someone heavy stepped on China’s end of the teeter totter and ask the money stats rolling their way.~

Give me a break!

No one will notice the difference. Its a number with no meaning. Now when their per capita gdp reaches ours…

Nope. Still nothing.

Hawaii_Jake's avatar

@wundayatta : Give you a break? No. Could you please explain how your snide little, sarcastic quip won’t turn out to be reality?

Until WW1, the UK was the center of the financial world. It’s currency was greatly envied. Where is it today? While still a First World power, it is greatly diminished. They’ve experienced one currency devaluation that I can think of off the top of my head since WW2, and that makes things immeasurably uncomfortable for the working class and poor of any country.

The US could be in much the same situation. Our government could find its hands tied behind its back on a number of fronts if our currency loses its luster.

Did you deign to read the article linked in the details?

The title question, the article, and the details all ask about our familiarity with China as a rising power. Your sarcasm answers in a perfect way that you really couldn’t care less.

wundayatta's avatar

I answered this question not too long ago. I explained it all then. I felt fine about being snide this time. If you really care what anyone else here thinks, you’d have discovered that other question and read the answers before you asked this one.

Hawaii_Jake's avatar

@wundayatta : I used the search function and turned up nothing on this subject. I care what people on this site think. That’s why I asked the question.

CWOTUS's avatar

In Catch-22 Yossarian has an encounter with an old Italian man who more or less illustrates @wundayatta‘s point… which isn’t invalid.

Yossarian is trying to convince the old man that the US and its allies are going to win the war. The old Italian doesn’t care what Yossarian says. He claims that Italy is winning the war. Yossarian thinks he must be mad or delusional, and says so. The old man illustrates that he knows the strategic arguments that Yossarian is making, but nevertheless, “We always win.”

Yossarian asks him to explain, and he does so. He reminds Yossarian that the Roman Empire at one time ruled most of Europe, North Africa and parts of Asia. Yossarian reminds him that the Roman Empire fell. The old man brightens up, “And yet, here we are! We won!”

Yossarian reminds the old man that Italy has had many failed military adventures, and the old man keeps countering with, “Yet, here we still are! We won!”

Yossarian reminds him that Italian governments fail like paper in the rain. The old man continues to argue, and with more vehemence and conviction, “And yet, we’re still here! The Germans came, and we won. The Americans came, and we won. You’ll leave, and we’ll win again. We always win!”

Like that…

Hawaii_Jake's avatar

@CWOTUS : I would love to live in Italy.

This question is not about the utter destruction of the US in a world dominated by China. I intended the question to be about our knowledge of the coming changes. I have obviously failed to communicate that.

tedd's avatar

China will never take the number one spot in the economic scales under their current model. Their entire economy is designed and thrives off the basis of cheap labor, and you cannot take the #1 spot with a model such as that.

In fact from what I’ve been reading/hearing… many people are waiting for China’s economic bubble to burst.

CaptainHarley's avatar

I don’t agree with the concept of China ever being number one in the economic area. They’re already faltering, if the most recent reports are to be believed, and they’re headed in the same direction we are… toward economic collapse.

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