Will China Stumble?

November 4, 2012 in Daily Bulletin

Conventional wisdom says that China, with about four times America’s population, will overtake it to become the world’s largest economy. It won’t happen writes Clyde Prestowitz:

  • China’s economy isn’t currently as big as the numbers suggest. A lot of the growth has come from building things that were over-valued. If you take into account their true value then China’s GDP is not half the size of America’s, but a third.
  • Moreover China’s growth has come at great cost to the environment. This will mean that soon rivers and farms will produce less, and health problems will increase, sucking up resources. This will put a brake on growth.
  • China might have four times America’s population, but what matters more is working age population. Due to the one-child policy there are more old people for each young person in China than there is in the United States. This too will make it difficult for China to become the largest economy.

It is a fascinating argument that shall either be proven right or wrong in the next three decades. Read all of it here.

Source: Foreign Policy