How many years before China is No. 1?
POSTED BY: TraineeAlternate
UPDATED: Saturday, September 5, 2026 17:48
VIEWED: 15091
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"At one time, only slightly more than a lifetime ago, the same was being said about the Japanese - that they had no innovation and that they had begged, borrowed, or stolen everything they had from the US and the British. By the time it was too late they had beaten the Russians and were well on their way towards becoming an imperialist power;"
The only reason that the Japanese were able to focus their economy towards innovation is because of massive American investment and trade with the Japanese economy post WWII. Despite their relative strength in innovation and technology (second only to the US), they have lost ground to the US over the past 15 years due to their overaly restrictive economic policies.
In any event, with regards to China, I actually got the opportunity to work there (in the heartland) for a few months, and I can tell you, with all honesty, that it will take several decades before they even begin to approach the economic and military strength of the US. Quite simply, despite their vasts amounts of cash, they DO NOT have their act together from a policy standpoint. Their political system is slowly coming apart at the seams, and they are constantly putting down local riots. Their education system is virtually nonexistent, and I can tell you from first-hand experience that their "university" educated engineers are about on par with your average US high school student in terms of knowledge and experience. Pretty dismal. Their best long-term asset, Western-educated nationals, are more likely to stay in their adopted countties than to return to China. The Economist recently reported that something like 70-80% of Chinese that go to be educated in the US actually stay in the US to work.
Even if the current long-term economic growth rates continue, by 2025 the Chinese economy will still only be 1/4 the size of the US, and by 2055 it will still only be 1/2 the size. So we're at least looking at another 70-80 years of US dominance. And this is assuming that China can keep up a growth rate of 8-10 % per year, which I personally believe is highly unlikely for two reasons:
1) Trend growth rates decrease as economies grow larger (e.g. the US trend rate is 3.0-3.5%, Russia is 6.0-6.5%)
2) At some point all the political turmoil bubbling underneath the surface will explode outward, and who knows what the outcome of that will be.
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"Despite their relative strength in innovation and technology (second only to the US), they have lost ground to the US over the past 15 years due to their overaly restrictive economic policies."
It still baffles me that nobody gets it. The more restriction, regulation, control, taxes, etc... the LESS growth, development and inovation you get.
Freedom = Prosperity
But everyone wants MORE laws, MORE restrictions, MORE taxes. Can't resist the urge to meddle.
We are the most prosperous country on the gorram planet, but nobody wants to admit it is because we have MORE FREEDOM (not PERFECT freedom, but way more than anyone else.)
grumble grumble grumble
~~~~~
"Funny and sexy. You have no idea. And you never will."
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If the US is "the most prosperous country on the gorram planet" then why is the standard of living so far down the list?
Nearly everything I know I learned by the grace of others.
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It boggles my mind that people are so unwilling to see where we're going right now.
People who used to shop at Filene's are shopping at Target; people who used to shop at Target are shopping at Wal-Mart.
We're sliding down, and cheap goods from China are making it SEEM like nothing's happening. If we're not careful, we're gonna pull a 'Rome'.
I'm not sayin' we can't bounce back from this, but it's gonna take some tough choices, like- have less meaningless crap to fill up your life, but if you must have it, buy American. (Personally, I see us turning into a purely service and retail economy, producing nothing, not even movies and music- Canada and Mexico will end with those jobs)
Look around; we don't need terrorists with a nuclear bomb to destroy us, if nothing changes, we'll have the economy of 'Dark Angel' without a 'Pulse'.(shame on those that don't get the reference
)
The world economy is shaking America's buying power down to her roots, and the only ones who will come out on top...well, they're the ones on top- now, I mean.
I remember when $100,000 a year meant you were practically rich, now it means you can afford to send your kids to college.
Chrisisall, living in the United States of Debt
P.S., will someone please take that hammer out of Bush's hand? There's enough nails in our collective coffin allready.....
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"I remember when $100,000 a year meant you were practically rich, now it means you can afford to send your kids to college."
I think this is largely due to inflation and the rising cost of higher education, but I don't think it's an indication of overall weakness in our economy. Even if families cannot pay for college out of their own funds, the US government and banking industry allows pretty flexible and solid lending opporunities, such that loans for higher education, on average, are a better investment than they ever have been in this country.
Additionally, over the past 20 years we've been able to maintain steady, solid growth while keeping down inflation, increased per capita purchasing power due to the lower prices of commodities, significant increases in productivity, and an unemploymen rate of 5.0%, which is phenomenal compared to our semi-socialist European friends. Also, the violent crime rate is at a 30-year low in this country. You can choose to be negative about the US economy, but quite frankly, the statistics show otherwise.
And your point about the US economy becoming primarily service-based is largely irrelevant. It comes down to comparative advantage - why produce the goods here when they can be bought at a cheaper price from another country? Maunfacturing hasn't been the backbone of the US economy for 40 years now, so it's ahistorical to pretend this is some sort of new phenomenon or that "it's all Bush's doing." Our economy should specialize in the areas in which it has the best advantage, which is quite clearly services, technology, and innovation. A great example is the Internet. It was developed by DARPA and then turned over to private industry and academia, and look at its effects: hundreds of thousands of jobs in the US alone (when in 1980 there were 0 Internet-related jobs). The US economy spawned an entirely new industry because it focused its energies in the areas where it had the most advantage - technological reserach and development. Trying to revert the US economy to what it was in the 1940's and 1950's (i.e. a primarily manufacturing economy) would be utterly devastating not only for the US economy, but for the world. Our best bet to continue producing ideas and innovation - these are not tangible commodities, but I would argue they are far more valuable then, say, manufactured toy or piece of furniture. Not to be a jerk, but this is all pretty standard neo-liberal economic theory.
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Quote:
Originally posted by rue:
If the US is "the most prosperous country on the gorram planet" then why is the standard of living so far down the list?
Nearly everything I know I learned by the grace of others.
Depends on who makes the list, as noted in this NY Times article:
http://www.nytimes.com/2005/04/17/weekinreview/17bawer.html?ex=1271390
400&en=44ea05b3e068feb5&ei=5090&partner=rssuserland&emc=rss
"THE received wisdom about economic life in the Nordic countries is easily summed up: people here are incomparably affluent, with all their needs met by an efficient welfare state. They believe it themselves. Yet the reality - as this Oslo-dwelling American can attest, and as some recent studies confirm - is not quite what it appears...
All this was illuminated last year in a study by a Swedish research organization, Timbro, which compared the gross domestic products of the 15 European Union members (before the 2004 expansion) with those of the 50 American states and the District of Columbia. (Norway, not being a member of the union, was not included.)
After adjusting the figures for the different purchasing powers of the dollar and euro, the only European country whose economic output per person was greater than the United States average was the tiny tax haven of Luxembourg, which ranked third, just behind Delaware and slightly ahead of Connecticut."
You can download the .pdf of the report here:
http://www.timbro.com/euvsusa/
"Keep the Shiny side up"
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Just adding this from info on the CIA home page about economic trends, etc. The answer to the question "How many years before China is No. 1?" is 11.
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Haywood. What if Neo-Liberal (love that phrase) economic theory is wrong? I think we all get the point about comparative advantage but even Smith and Ricardo expected one of the trading partners to make *something.*
The problem as I see it is two fold. First service economies do not create wealth they add value. Service industries are second order economic entities, someone somewhere has to have created the wealth that they then spend on services. If nobody creates wealth how can they continue to spend it?
Second problem is that the US has no monopoly on "good ideas." In fact overall it hasn't created that many from "whole cloth" a lot of major innovation came from elsewhere it's just that America was far far better at seizing potential and exploiting it than anyone else. This idea that the US can create a brain trust who's ideas somehow buy the material goods that it no longer produces is an interesting idea for Science Fiction writers. What would a US economy based on that principle look like? Would it be a servant state? Where the few that earn the foreign exchange keep the rest of the population as various forms of domestic servant? Or would it be some pseudo socialist dictatorship with smart folks forced to think to support the unthinking, unworking masses?
I ask because I can't imagine how you could have a society that makes nothing but ideas. I can't imagine how they could maintain a big enough long term advantage or how they force the rest of the world to accept interlectual property as a reserve currency?
I believe this is like phantom WMD's. There are people now profiting big time from the current "neo-liberal" economic regime. They have no interest in if it's sustainable as long as they get to profit from it now and they sell these dumb ideas of some kind of innovation economy to reassure the masses that what they see with their own eyes is not true...
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Quote:Yes, I must try to remember that all I see is false; the ice caps are not melting, the climate is not changing, our standard of living is as good as it was 25 years ago, war is fast becoming obsolete as we are but one world, united in the common good, our leaders are caring and articulate and foward-looking, corporate America has re-discovered the value of the individual....
Originally posted by Hayward79:
Our best bet to continue producing ideas and innovation - these are not tangible commodities, but I would argue they are far more valuable then, say, manufactured toy or piece of furniture. Not to be a jerk, but this is all pretty standard neo-liberal economic theory.
What a deluded dumass I can sometimes be, thinking that all ain't well all the time....
Chrisisall, ignoring that little fire in his kitchen, 'cause his statistics show his house burning down to be an unlikely event.
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I'm going to disagree with this neo-liberal thing, whatever it is. We need to be in manufaturing as well as information industries or we have no impact on innovation and gain nothing from it.
The gas-powered vehicle clearly has to go. It's totally inevitable, and it will happen in the next 20 years. The companies that produce the best alternatives will become corporate superpowers. Since the purchase for Chrysler by Daimler, there are only two major American automakers, and both are in perilous danger of going bankrupt this year. If this happens, then you can pretty much bet that the winner of this alternative energy car thing, and event which turn an industry on its head, and yield upwards of a trillion dollars in revenue long term, will not be us.
This same idea could be applied to a lot of manufacturing that the US has already been more or less pushed out of. TVs, Computers, anything with a remote possibility of innovation should be kept alive if we're to benefit at all from that innovation.
I guess I'm wasting space, let me put it more simply. I agree with Fletch. And Chris. I don't got a lot to add here.
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