General Question

zen_'s avatar

America still has the largest economy of all nations, but China has recently surpassed Japan. In 20 years, it will pass America, or so it is forecast. Is this a good thing?

Asked by zen_ (6268points) August 29th, 2010

With what we know of China, and things don’t seem to be changing there much. Just more cash.

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38 Answers

josie's avatar

It is just like wealth among individuals. The more money you have, the more choices you have, the more you can leverage towards creation of wealth in the future, the more power you wield etc. etc. So would you rather that describe you, or somebody else. If you think it would better if it were you, then China’s growing economic power is not a good thing. If it is OK with you that you have to follow in somebody else’s economic shadow, then I suppose you would think it is good. I see indications on Fluther that quite a few of the collective are curiously resentful of the wealth producing capacity of the US, so they probably think it is a good thing. I do not.

Katexyz's avatar

It’s not a good thing or a bad thing, just a thing. China has three to five times the work force of America (depending on whose statistics you use), so naturally they would be able to produce more and have a larger economy. Also realize that economic predictions of events, even a few months in the future, are tragically inaccurate. There might be 5 recessions in America and 8 in China by then; there may be periods of intense growth, or total stagnation. We don’t really know what can or will happen, but what matters is this, China and America are diplomatically and economically interdependent upon one another. China experiences growth because America buys its goods. America survives economic turbulence because China supports its debt. China and America share the same goals diplomatically. No switch will be flipped if China surpasses America, nor do we even know if they will.

stranger_in_a_strange_land's avatar

The US is a declining power, China appears to be on the rise. Whether China can sustain this growth while surpressing basic freedoms domestically is questionable. China is sitting on a political powder keg while playing with matches, so to speak. All of this economic progress could dissolve overnight into internal chaos. If the US were to do the “banana republic” stunt of repudiating the national debt (likely eventually, as the US national debt is unpayable except by hyperinflation), China could be stuck with trillions of dollars in unredeemable waste paper.

If China can reform her political system and does surpass the US economy, so what? China would be merely taking her long-delayed rightful place in the world.

lilikoi's avatar

I think @stranger_in_a_strange_land made good points.

Whether it is a good thing or a bad thing, it is the natural way of things and there is no way to know. For China, it is probably a good thing. For America, it is probably not a good thing.

CaptainHarley's avatar

Who gives a crap! Focus on what we can do to make our Country better, not on comparing ourselves to other countries, and everything else will fall into line.

Qingu's avatar

Of course it’s a good thing. China is home to a billion people who have, until recently, overwhelmingly lived in poverty. It’s a good thing that so many people’s living standards have so rapidly improved.

Is it a good thing for America? Probably. Economic development is not a zero-sum game; in fact it’s mostly notable in the long term for being the opposite. Presumaby China won’t rape and pillage less developed countries for resources nearly to the extent that Europe and the United States did during our rises to power.

the100thmonkey's avatar

@Qingu – presumably?

That’s a big assumption. Care to expand?

Hawaii_Jake's avatar

What hasn’t been mentioned yet is that every economic power in the past has turned that to military power. Who’s to say the Chinese will not expand their already huge army and other armed forces, and then the question becomes how they use that power. That is something I doubt any of us can answer.

The rise of China as a economic super-power will only be a good thing for the US in particular, if the US can somehow leverage its position as a voice for democracy and equality. Of course, we need to maintain our ability to innovate a viable economy.

iamthemob's avatar

I feel like the translation of economic into military power may be a throwback to times when there were significantly independent nations with differing political and economic ideologies that could be maintained without interference from the outside world. Because of globalization, we’ve moved more and more to a universal, capitalist market (despite adherence of some to internal economic systems that may be anything but capitalistic). Because of that, there’s less need to convert economic power into military power – economic power IS military power. If you dominate the market, you withhold from those you want to influence. If there’s no dominant power, it implies market cooperation – which would further imply at least tolerant, but certainly not aggressive.

This is overstated and oversimplified, however, but I think it’s accurate. And I think that the governments that we’re mostly concerned about in terms of accelerating their arsenals (e.g., the bug out regarding Iran’s nuclear capability) are in the developing world. It indicates that those without economic power may opt for a military uptick in order to offset the imbalance (not causal, of course, but at least an indication).

Qingu's avatar

@the100thmonkey, it’s harder to invade and occupy countries nowadays than it was in the 1400’s – 1800’s—a time when many countries didn’t even exist.

CrankMonkey's avatar

There are 1.3 billion people in China and 310 million Americans. If they were equally productive, the Chinese economy would be four times as large as the American economy.

LostInParadise's avatar

Watch for interactions between China and Russia. It may be interesting, though not very pretty.

MRSHINYSHOES's avatar

Yes, it’s amazing how China has grown within the last 25 years. When I visited China as a kid back in the late 80s, it was still relatively backward and developing. Most people rode bikes in the cities and a lot of them never saw a cassette recorder or a camera before in their lives. When I re-visited the country three years ago, I was surprised to see almost everyone, even little kids, with cell-phones, and that the Chinese have become the greatest Internet users on the planet! Most city folk do not ride bikes anymore——they drive cars, and many of the types of cars I saw in China on my last visit were BMWs, Lexuses, and other luxury cars. I even saw quite a few Rolls Royces! The Chinese have a very strong work ethic, as well as a desire to possess the best and most luxurious goods. Nothing is too good for them. Unfortunately, however, to be successful sometimes overrides their concern for human rights and environmental issues. Nevertheless, no one can put a candle to their amazing growth in just a short period of time.

I think it is a good thing overall. The tourism industry has been in a big slump here in Canada and the United States for the past decade, and I’ve heard there will be a lot of Chinese tourists coming to America in the next few years. In addition, we have to look past the economic wealth that China now possesses and understand that with their material growth, new advances in medicine and technology in China will no doubt aid the rest of the world. Who knows, considering their ingenuity and hard work, maybe the Chinese will someday find a cure for cancer or other serious diseases. ;)

SeventhSense's avatar

No because regardless of economic growth the government holds a stranglehold on the very life of its people. It’s not a democracy. They do not hold human rights in high regard. The government acts with impunity and disregard for freedom, expression and the ability of its people to be autonomous. Materialism serves as an opiate or carrot for the masses most of whom live and work like slaves. This can not last for people who enjoy a level of material comfort for a season. They will expect more human rights and privileges in the future and will be violently oppressed as in the past. They are not a model of anything other than a dangerous, government controlled economy.

ETpro's avatar

@josie Thinks that the world’s economy is a zero sum game. I think it is an infinite sum game. I think all the reasons @SeventhSense fears China’s economic development are true, but to me they suggest we should not fear but welcome it. China is slowly evolving into a more capitalistic and a more democratic state, and economic development will drive that movement. No government, no mater how authoritarian, can hold a lid on 1.3 billion newly affluent people now yearning for freedom.

China has a long and storied history. Where the US is 234 years old, China has been civilized and mostly independent since the Shang Dynasty was founded 3,710 years ago. In all that time, the Chinese have learned that sudden, lurching changes often do great harm, as Chairman Mao’s Cultural Revolution and resulting bloodbath demonstrated not so long ago. But change they do, and will.

We need to not worry about China but instead get our own house in order. @stranger_in_a_strange_land is ready to write us off as done. Our best days are over and there’s nothing to it but to declare bankruptcy and be a banana republic. Why? Our national debt was 120% of our GDP at the end of WWII, and we paid it down to just $1 trillion before the far right and Ronald Reagan launched us on a debt-financed spending party with their massive 60% tax cuts for the richest Americans.

Our debt is big now, but still it’s 30% lower as a percentage of GDP than it was in 1945. If we paid that massive debt down after the cost of the Great Depression and fighting WWII, why can we not do it again? We just have to quit being cry babies, quit following a crowd that perpetually lies about tax cuts paying off the debt that they in actual fact created, roll up our sleeves and do what the greatest generation did.

And if we do that and meanwhile China becomes a bigger economic engine than us with their 1.3 billion people, that’s just fine. That’s 1.3 billion more well-heeled customers we can sell our goods and technology to.

iamthemob's avatar

@ETpro

Impressive and well-put. I’m tempted to say “tell us more.”

ETpro's avatar

@iamthemob Thanks. But you know me and walls of words. Careful what you wish for. :-)

SeventhSense's avatar

@ETpro
China is slowly evolving into a more capitalistic and a more democratic state
I think this is a bit idealistic and there is little to show that the leaders have any intention of Western ideals, freedoms or thought. Furthermore the Red Army has shown a willingness to stand behind their leaders blindly. The government’s all out war against Falun Gong is but one example but quite telling. Essentially a type yoga (for lack of a better word) is banned! The continuing incidents of unlawful executions, torture, murder and ever increasing repression. Their horrific invasion and subsequent treatment of Tibet which was essentially the most peaceful nation on earth is perhaps the most glaring. These can not to be dismissed offhand. The latter being a totalitarian and blatant abuse of power certainly no less than what we would ascribe to North Korea. The only difference being our business relationship with China.

But those who praise Beijing for reshaping its economy and allowing some of its citizens to improve their standards of living have ignored one unseemly fact: China is becoming more repressive, more suffocating of civil society-and potentially more combustible….

Even some state-sponsored Chinese academics have begun to predict that if inequality between urban dwellers, laid-off laborers and peasants continues to rise, and if the government does little to accommodate civil society and tolerate dissent, the People’s Republic could face a social explosion or another national protest movement similar to the one in 1989. “There are hundreds of little brush fires burning,” warns David Zweig, an expert on rural China at Hong Kong University of Science and Technology. “Will they become a blaze?”
Shangai Surprise

The governed does not run the country. This is a significant and very important distinction for the westerner when considering the attitude of the government of China.

ETpro's avatar

@SeventhSense There can be no question but that China has a very long way to go to become a democratic, free state. Censorship is rampant. News is controlled by the state propaganda agency. Dissent is brutally repressed. Many of the young people entering higher education today are unaware of their forebears’ flirtation with freedom. It is almost impossible for them to even learn what happened in Tienanmen Square. Most think the elder freedom movement people are just duped by America. But change si still inching forward. It moves in slow steps with many reverses.

If China does not become more free, I believe that they will have a much harder time ever catching the West in productivity.

Zag_grad2010's avatar

Well it is a good thing that their middle class is growing since they will have more purchasing power. However, if China keeps the their currency pegged to the dollar it won’t be good. If their currency is artificially weak against the dollar then American goods will seem expensive to their citizens and won’t buy our goods. This is dependent on America producing any goods though. We cannot rely on being a country that only provides services- we need to create goods and manufacture if we don’t want China to surpass us.

iamthemob's avatar

@SeventhSense

I don’t think, as I infer from ETpro’s last post, would be able to honestly claim that China’s all good in terms of it’s recognition of human rights. However, I feel like China will explode and, because we’re democratic, we’re all good. Unfortunately, I think that we both could very well explode. I think people are going to start looking more and more into our foreign economic policies, and are probably going to get more and more ticked seeing how they’ve been screwed. Of course, in China it’s by the government. Theoretically our system allows for more dissent and therefore we can get rid of policies that limit our freedom, thereby stimulating the economy. That’s if policy decisions rested solely in the government’s hand, where we have a system of accountability. Contrary, I see more policy decisions based on the well being of our corporations, which at this point are trust-busting days style bloated.

Response moderated (Unhelpful)
vamtire's avatar

WONDERFUL THING!!!!America is powerful and wealthy and they think they are the best and all other races are below them,in the past when Columbus came to america,he thought the locals were babarians and he is better,now they think africans are less evolved than them.
American kids have never been beaten and have no discipline,the law allows them to own a gun making lots of crime.The people are spoilt and ungrateful if you compare to china or anywhere else in the world,they already have so much but still complain all the time.
America is a twisted place,the children can freely scold vulgarities at their parents,and they will not be satisfied the people will do worst things.
China ought to teach them a lesson!!

josie's avatar

@ETpro Josie does not think it is a zero sum game.
Josie does however, think that American politics politics inhibits economic growth in the US. There are lots of ways to put words in my mouth but this is not one that I can let lie. I am sure that I still have much to learn, but I am not stupid either.

iamthemob's avatar

@vamtire

I’m not going to say you haven’t described more than a few Americans…but I want to know what experience you’ve had that could justify stating that all Americans are racist, spoiled, gun toting kids who curse all the time because they were never taught otherwise…and really if they had just been given a good beating they would have learned something. Columbus was European so if we believe we’re more “evolved” than all the other “races” (America is a race?), then rag on Europe, not us…:-)

So what happened? Where did this come from?

SeventhSense's avatar

@iamthemob
I think @imathemob brings up a good point. The world is becoming very ripe for international conflicts and in the past when economic situations became as they are at present there were major wars. I think that war in Asia is almost inevitable and the US will most certainly be involved. China is involved constantly in behind the scenes work with nations like Iran to establish their slow advancement towards world dominance.

No nation has ever established the preeminent position of economic leader without exercising significant military might. The position between China and the US will be the same. We will not be displaced without war. The situation is far too grave in the US and we have to much to lose and much to gain by either course.

IchtheosaurusRex's avatar

Don’t believe everything you read about China’s economic future. They’re in a bubble right now, and if anything, their economy is fragile and still highly dependent on exports. As such, it’s heavily tied to ours, and any growth there is inextricably tied to growth here. They’re a long way from becoming a burgeoning consumer economy, which is what they’ll need to sustain growth.

This is just one of many articles about China’s economy that you can find around the Web. They have a multitude of structural, political, and social problems to overcome in order to remain on a path of sustained growth. Given that their economy is still only about a tenth what ours is, for them to overtake us in 20 years seems pretty fanciful.

ETpro's avatar

@josie I apologize if I misread this statement “It is just like wealth among individuals. The more money you have, the more choices you have, the more you can leverage towards creation of wealth in the future, the more power you wield etc. etc. So would you rather that describe you, or somebody else.” Emphasis mine, but that last thought smacks of zero-sum thinking. I want a really big slice of the pie, and there’s only so much pie. In some games, that’s how it works. There are a defined number of points, and to win you have to get more than anyone else. Electoral votes for President are a zero sum game. But thnakfully, economics is anything but zero-sum. We can produce more. We can innovate. Look at how the harnessing of electricity has changed the world, how the computer has changed it more.

So the best outcome is we get more and they do to. They will be much better trading partners if they can buy our goods in the future just as we buy theirs today. And as their wages rise to levels more like our own, the playing field for trade will be much more level. I meant you no personal criticism. I just thought it important to point out that important distinction in which game theory to apply.

zen_'s avatar

Josie talk in third person.

SeventhSense's avatar

@IchtheosaurusRex
Exactly and as mentioned in the Reuter’s report
“Many experts are confident that a pragmatic China will succeed in making the transition in the coming decade to a new growth model anchored by urban-based consumption, technological upgrading and a greater role for market forces. Doubters, though, have two prime reservations. First, that China has left it too late to wean itself off investment-heavy exports. And second, that the ruling Communist Party will fail to overcome the vested interests resisting reform.”...
The East will not become the West overnight. It could be a Civil War only but there will be blood shed for any emergent praxis. And you can bet it will be a completely different political animal than we’ve seen.

SeventhSense's avatar

@vamtire
Well of course we’re an easy target on top of the hill but I don’t think it’s any more racist on either side.

vamtire's avatar

@iamthemob should i say white then?

iamthemob's avatar

@SeventhSense re: @vamtire

Still think so? :-)

@vamtire

Sure…but my question still remains – where is this information coming from? You shouldn’t make generalizations about anything unless you have some vast experience with it, your experience is fairly universalized, and you have the appropriate statistical data to back it up. Otherwise, you’re not really showing anything that is helpful or could make a change.

SeventhSense's avatar

@vamtire
Now we’re separating by skin color? Come on now. Let’s be civil.

vamtire's avatar

@SeventhSense I said americans at first
@iamthemob My information is from my background knowledge and inference

iamthemob's avatar

Okay. But that’s not enough to say that an entire group is “this way” or “that way.” That’s the definition of racism, sexism, homophobia, classism, ablism, and isolationism (depending on the group that is judged).

You’re statement says “Americans” (and later “White People”) are terrible for various reasons and China’s going to teach us a lesson. That’s not a response to the question as to whether there would be benefits to China’s position in the world economy, or if we should do something in the U.S. to try to regain momentum.

If you’re here to just say that, okay…we heard.

DocteurAville's avatar

Why wouldn’t they be the 2nd economy in the world? A lot of the manufacturing jobs in America ended up in China. As the trend continue –American product designers outsourcing the manufacturing to China– they will be at the top within those 20 years, if not earlier.

American greed is fueling it. As for Japan, I am not sure if they are doing the same (exporting their jobs over to China).

bolwerk's avatar

It’s a rather meaningless concern by itself. It’s a bigger concern in that as they consume more, and more of them consume, it results in more pollution and resource scarcity. We do need to contend with that.

FWIW, their per capita economy will be behind the per capita output of a typical western economy for a significantly longer period of time.

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