Reading through this thread, there seems to be a lot of agreement that China will overtake the US. Even assuming the days of American dominance are numbered, I just don’t see the Chinese ascending the throne.
We have a lot of long-term problems that have been discussed to death here (debt, debt and more debt) but I believe these pale in comparison to the Chinese.
First of all, they are still a totalitarian government. To my knowledge, there is not a great track record of commingling capitalism with a repressive government.
Second, they have a banking system weighed down by a lot of worthless loans to decrepit state industries.
Third, and I believe most important, they have a huge demographic time bomb looming that makes our social security problem look tame.
If you look at the recent history of the western countries, most were agrarian societies until the industrial revolution. As these countries became industrialized and wealthier, their birth rates gradually declined. The pattern that the western nations followed could be summarized as get rich, then get old. This is the SS problem in a nutshell.
China, on the other hand, will get old before it gets rich thanks to their one child policy.
If you think we’re going to have problems retiring the baby boom generation, how in the heck is China going to pull it off?
