I found myth #2 the most interesting:
Myth No. 2: China could surpass the U.S. as the largest economy in 10 years.
Truth: There is a reasonable chance that China will never surpass the U.S.
China will might never pass the U.S. if the government makes the right moves to cut the federal deficit, keeping steady interest rates, expand trade, and reduce government regulation, especially taxes. These policy reforms may prevent China from passing the US economy. Furthermore, some economists take a look at the past 30 years and assume the next 30 years will be the same in economic progress. This is a fundamental mistake in analysis of any economy. For example, the USSR relied on its population to support its industrial economy, which the USSR put considerable emphasis on. Thus, with the increased pollution and decline in life expectancy, the nation collapsed. China is in a similar situation.
Interesting article, and I like your stance on the myth. I too believe the United States controls China's direction for the future and can prevent them from surpassing us.
ReplyDeleteThis is interesting article and I would have to sit on the fence on this one. It is highly unlikely that the U.S. will experience a recession, similar to the one that we are currently recovering from, within the next 10 years. However, if we are plagued by a recession once again it may provide the opportunity for China to surpass our economy.
ReplyDeleteThe total economy does not matter that much. The income per capital in China is still very far low in China and its unlikely China will surpass US for a long time. Policies that can make both countries better off and make the living standard in both nations rise should be the ones that make a difference.
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