Daily Archives: December 20, 2013

Why Is China Going to Beat the US in GDP Very, Very Soon?

If market trends continue, China is very likely to overtake the US in GDP by 2025. Why is this?

Is it because China has 1,351 Million people compared to the US population of 314 Million?

Is it because the world is still aggressively outsourcing to China?

Is it because China controls 90%+ of the global supply for some of the increasingly important rare earth metals?

Is it because China is effectively balancing socialism with capitalism?

Is it because they have manufacturing plants the size of small cities?

Is it because they run on five-year plans designed to improve the overall state of the country every five years?

Is it because they recognize not only the importance of public health-care but the importance of getting it right?

Is it because they realize that you can effectively defend your country on 6%- of your budget (and 2.2% of their GDP) compared to the US that needs to spend 11%+ of their budget (14% of revenue and 4.4% of their GDP)?

Is it because the populace is actively protesting GM (Genetically Modified) food?

Is it because they are pushing ahead on R&D and exploration (having landed the first spacecraft on the moon on December 13 for the first time since Russia landed Luna-24 in 1976)?

It’s all of these reasons, and more. While the US media is too focussed on the scandal of the day, the Chinese media, while censored, is more focussed on the issues. While the political parties in the US squabble over minutia and blame each other for the government shutdown that just occurred, and the one that is likely to happen in January, the one party system in China is discussing amongst itself how best to move forward (and keep the necessary control). While the US is on the verge of another energy crisis, China is building new power plants, including those that run on renewable energy sources, as fast as it can.

Now, SI will be the first to admit that China is not without its problems. It still has way too many coal-producing power plants, too much smog in its big cities, limited freedoms (especially where the press is concerned), urbanization issues (as it is still building cities it doesn’t yet need to keep people employed), logistics challenges, and so on. But compared to the US, where the republicans and democrats spend all their time blaming each other and fighting instead of working together to advance the country, where the government apparently spends too much time and money spying on its own citizens and pursuing controversial drone technology instead of fostering better inter-agency cooperation, public support for homeland defence initiatives, and scientific research endeavours, and where education spending often gets the shaft (with the Department of Education budget typically clocking in at under 2% of GDP), China is making more progress, and doing so faster, than the US.

If the US wants to retain its top spot on the economic powerhouse rankings, once the elections are over, the elected representatives have to work together to do what’s best for the country, otherwise, despite all of the limitations of socialism that one can identify from a free market perspective, China is going to win, and win big, and do so at the expense of the US.
While it may be an inevitability that China overtakes the US in GDP at some point in the future, it doesn’t have to be the near future, but unless the US makes a concerted effort to shape up from a global perspective, and forces its politicians to grow (the fuck) up, we may all need to start registering in Mandarin classes very soon.