The consequences of a wealthy China

[Almighty Colin]

Originally posted by cj@Jul 17 2003, 07:18 AM
those future projections are based on the US continuing with the current or average growth rate ... at what point does the US stop growing? and at what rate does the US have to continue growing to remain the economic super-power?

I agree with you in that those projections assume that both China's and the US growth rates remain stable. The official Chinese estimate probably assumes that China's growth rate will taper off faster than the US growth rate which makes sense. Maintaining 7% growth is more difficult than maintaining 3%.

The question is whether growth levels off as economies become (relatively) exceptionally large or continue to decrease in growth rate.
One would think that progress (technology, information, managerial techniques) would provide some minimum level of long-term growth. Is that 2% or 3%?

If the US economy absolutely stopped growing and China continued at 7% per year, China would be number in 2035. Neither of those is very probable though.

An important question is why the US is the world's largest economy. I think most of the answer is the large population and the fact that it is highly industrialized. China and India have larger populations but are very far behind in GDP per capita. Japan is the number two economy. The US economy is about 2.5x the size of Japan's. Japan's growth rate and industrial techniques are about the same as the US' but their population is less than half of the US. To catch the US Japan needs a massive population explosion and/or much bettre manufacturing techniques.

Germany, UK and France round out the top 5 economies. Their populations are relatively small though. The US has almost 5x as many people as France. France would have to have a GDP per capita 5x that of the US to match the size of it's economy. The US per capita GDP is actually higher though.