6 ms·

IMF: The Age of America About to End

69 points by pjy04 15y ago

Florin_Andrei 15y ago
> It’s a lesson we could learn more cheaply from the sad story of the British, Spanish and other empires. It doesn’t work. You can’t stay on top if your economy doesn’t. Kind of tongue-in-cheek - but that's a lesson I learned from playing Civilization. I know it's just a game, yadda yadda, but sometimes I do wonder how much of it translates into reality. E.g., if this was a game of Civ, China's domination would be pretty much ensured at this point: they have so many "cities" that their "production" output and "science" output will overtake anyone else's in short order. In fact, that's how I prefer to play the game often: just build minimal defenses to make sure my cities are not conquered, and invest in growth as much as possible. Sooner or later, I'm the 800 kg gorilla of the whole Civ map.
- tlear 15y ago
  In Civ with the current balance of power US would be launching an all out nuclear strike against China to win the game at this stage.
  - pjy04 15y ago
    If you play Civ, you should really check out victoria II. Much more realistic http://www.paradoxplaza.com/games/victoria-2 http://www.paradoxplaza.com/games/victoria-2
    - Qz 15y ago
      Was wondering when I would see crossover between this board and those boards!
    - RobertKohr 15y ago
      No OS X support... :( I used to love Europa Universals 2. Looks like paradox doesn't value mac users anymore.
- allenp 15y ago
  I think the difference in the real world is one of quality. Quantitatively we may have the same or less number of factories or scientists, but the quality of our science and research is so much better I think it would be very hard for China to compete if things turned hot.
  - SkyMarshal 15y ago
    I keep hearing this repeated, and it's completely false. Even if the Chinese educational system only turns out rote memorizing robots incapable of the kind of creative, breakthrough leaps of discovery the West prides itself on and will never evolve due to cultural momentum and restraints (which I don't buy either but that's a whole nother argument), being economically dominant will enable China to build world-class research facilities and import world-class talent. The US benefited from such a scientific talent immigration trend after WWII. The European theoretical physics community is benefiting similarly from LHC and the short-sighted cancellation of SSC. Any area of research that requires massive, long-term, blue-sky funding will be dominated by governments willing and able to provide it, and will attract the best talent from all over the world. The major problems China will face in this instance will be the language barrier and reticence of some scientists to work for a more authoritarian, censoring government. The former is easily solved, the latter is problematic but not insurmountable - even scientists have their price and plenty would convince themselves to work under such a regime in the exact same way Google did (change it for the better by 'engaging' it), especially when the alternative is a stagnant career and dead-end research due to lack of funding elsewhere. This conceit that many in the US and West have that the quality of our science and research is innate and unimpeachable is both ignorant and complacent. Where there's a will there's a way, and China certainly has the will.
    - allenp 15y ago
      I have no doubt China could build high quality centers of science and import high quality researchers - my only argument was that until this happens the sheer number of scientists in China is not a good way to measure their science production (it's just not apples-to-apples like in a Civ game).
    - 15y ago
- yxhuvud 15y ago
  Well, it is just that the english already won by domination back in the 19th century...
- doyoulikeworms 15y ago
  Is the world more like Civilization III or IV? From what I remember, the overhead of high city counts in IV can be prohibitively high. It makes more sense to scale vertically rather than horizontally. Unless, of course, you employ the State Property civic (apt!). Interestingly, China has been switching to the Free Market civic for the last couple of decades... More trade routes and more incentive to support corporations, but higher overhead for the huge city count. There's a reason why you go through revolution when you change civics.
keiferski 15y ago
Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and rising. So we won't be the top any longer, but we'll still be enormously dominant. So? Competition drives innovation. All the "America is doomed" folks act as if America is going to crumble to pieces simply because we are no longer the only gorilla in the room.
- kokon 15y ago
  But I think the implication is a lot more than just being the second. Once you're the second, you can't easily dictate anything anymore. Just like having multiple buyers, the seller has more options to sell the product.
- mike-cardwell 15y ago
  The danger comes when China has enough money to equal the US in military strength and decides it wants as much influence in World politics as America does. The rest of the World doesn't need that complication.
  - narrator 15y ago
    The Chinese have not had a tradition of colonialism. They're just not as obsessed with controlling the world as the west is. They are assertive over neighboring areas that have been arguably part of China for a long time like Tibet, Taiwan, Macau and Hong Kong but that's pretty negligible compared to the global domination aspirations of the Soviets, the Axis powers or Colonial European powers.
    - tybris 15y ago
      They're working on it http://en.wikipedia.org/wiki/Neocolonialism#Sino-African_relations http://en.wikipedia.org/wiki/Neocolonialism#Sino-African_rel...
    - deleted 15y ago
edw 15y ago
Why is this story here? It should be posted to Digg and Reddit, home to all the people awaiting the Ron Paul Revolution and are posting stories about peak oil and the need to return to the gold standard. Unless, of course, the content of this article is somehow going to influence your business plans or YC application or your Ruby or JavaScript code. (No, I didn't think so.) Butterfly flaps wings Adjust your business model The U.S. is doomed
mattee 15y ago
We would remain, however, the most technologically advanced nation. Plus, GDP per capita would remain far higher. The majority of economists consider GDP per capita the most important thing when determining the wealth of a nation.
knowtheory 15y ago
Oh yes, lets parade out yet another rising Chinese menace story. Are we counting the cities worth of empty condos in the Chinese GDP? How exactly did the IMF arrive at these numbers? Is there external confirmation of government stats? There are definite signs that there's a bubble waiting to pop in China, just as it did in the US, so i view even analyses by the IMF with some skepticism if they're based on government reporting, given that the government of China has both the means and the incentive to present itself as a growing economic power. How about we hold off on the sound and fury until 2016, mmkay?
patrickk 15y ago
Somehow I doubt these predictions are going to bear out. History always repeats itself. In the 1980s it was Japan that was going to crush the American economy. For the last twenty or so years the Japanese economy has been flat (it's still the 3rd biggest in the world however). Japan tried to boost the economy with massive expenditures in it's infrastructure, to no avail. Compare that to China's approach of building high speed rail networks that get cancelled, and to build huge 'cathedrals in the desert' - cities that are overpriced by the government, who refuse to let the price to be dictated by the market (which is what would happen in a true capitalist system). The result is that most locals are priced out of the market. The reason that the cities are being built in the first place is to drive growth figures. Not having any oversight may result in some dramatic revelations about China's supposed growth in the coming years. http://news.bbc.co.uk/2/hi/8691083.stm http://news.bbc.co.uk/2/hi/8691083.stm http://www.bbc.co.uk/news/business-11748644 http://www.bbc.co.uk/news/business-11748644 http://www.sbs.com.au/dateline/story/about/id/601007/n/China-s-Ghost-Cities http://www.sbs.com.au/dateline/story/about/id/601007/n/China... Related HN discussion: http://news.ycombinator.com/item?id=2386584 http://news.ycombinator.com/item?id=2386584 EDIT: Added link EDIT 2: Typos
- SkyMarshal 15y ago
  Japan has never had more than one half the population of the US. For Japan to have become a larger economy it would have required the average Japanese citizen to be around twice as productive as the average US citizen. They're productive, but not that much. China has four times the population of the US. They're already the world's second largest economy based on the development of about 350-400 million people in the eastern section of the country alone, and they still have another ~800 million to go spread through the rest of the country. While there are significant obstacles to further developing countries the size of China and India, they have untapped potential left that Japan didn't. General comparisons to Japan aren't valid here.
  - ChuckMcM 15y ago
    I believe the insight the author was after here was not a general comparison of Japan to China, rather that China's "growth" has a component to it which is artificial. That artificial growth comes from reporting GDP on building things that nobody uses (like Cities). Conversely, like a large private corporation which doesn't have to reveal costs in any general accounting rules kind of way, China has the ability to create a view of their economy which is 'untrue.' So put another way, the author posits that in a market economy the creation of a new city would be done by actors who were themselves creating more economic output as a result of productivity gains from having city infrastructure. Thus economists see new building as a leading indicator of economic growth. However if you simply spend a billion dollars to build a high rise office tower without any tenants or even a prospect of leasing it out, the 'leading indicator' aspect of that data point is completely wrong. The building will sit there empty, generating no economic growth whatsoever. There are hints that China is manipulating its figures in just that way. The bigger challenge for China is that in the eastern part of the country the standard of living is growing much more rapidly than it is for people living in the western half of the country. The last time that happened Mao Tse Tung used it to his advantage to overthrow the incumbent government.
weavejester 15y ago
"According to the IMF forecast, whomever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy." Technically this has already happened, as the EU has a larger combined GDP than the US. It's also not too surprising. For it's land area, the US is very sparsely populated, and 350m people are not going to have the same economic purchasing power as 1000m people, assuming the latter group can catch up in terms of infrastructure and technology with the former group.
- billybob 15y ago
  Is that a fair comparison? The EU is still made of up sovereign countries with their own economic policies.
  - Apocryphon 15y ago
    And for all of the troubles in California and other states, I'm not sure if any of them required the sort of bailouts that the PIIGS needed.
  - silvestrov 15y ago
    They are only economical sovereign within strict limits. Greece might be able to tell you a bit about recently having to implement unpopular economic policies demanded by EU.
  - weavejester 15y ago
    The EU is a single market, and economic policies are governed to some degree by Brussels. I guess it's open to interpretation, but most sources I've seen describe the EU as a single economy, including the CIA world factbook.
Cherian_Abraham 15y ago
Remember that China holds a lot of our debt. You will not see much public chest beating from China over this because of that fact. Both are equally vested in each others success as the other. China does not want value of the US bonds to plummet and US needs a stable manufacturing partner. At least for the foreseeable future, this economic and political two-step will continue. However this does present serious doubts about the irrational exuberance in the strength of our markets for long term. It is hard to gauge China and its intentions. I am not saying that US has moral supremacy over China, but that China seems to be doing now what US used to do, for its own stability sake, twenty years ago. It is preparing to be the economic behemoth, despite the troubles it face in real estate and regionally. The next twenty years should be pretty interesting. Edit: I wanted to add a reference to this paper out of the Pentagon from two Pentagon top level staffers who assert that we should reduce our military spending and reinvest it in our youth. A very prescient analysis of where United States is heading, in the world. I wanted to add it as its own HN submission, but was not sure if it would be well received. Here is the link to the pdf: http://www.wilsoncenter.org/events/docs/A%20National%20Strategic%20Narrative.pdf http://www.wilsoncenter.org/events/docs/A%20National%20Strat...
- espeed 15y ago
  I posted info on the Y Article yesterday: http://news.ycombinator.com/item?id=2478908 http://news.ycombinator.com/item?id=2478908
  - Cherian_Abraham 15y ago
    I rest my case :)
    - espeed 15y ago
      However, yesterday these got traction... "Warren Buffett is now betting against the US dollar" (http://news.ycombinator.com/item?id=2476584 http://news.ycombinator.com/item?id=2476584) "China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings" (http://news.ycombinator.com/item?id=2479432 http://news.ycombinator.com/item?id=2479432)
NY_USA_Hacker 15y ago
Yes, America has the worst economic system there is except for all the others that have been tried. China? You GOT to be kidding! They are run by a one party dictatorship. They run essentially a centrally directed, command economy. They are still so poor that on average they have a tough time even getting enough rice for their people. So, starting from where they are, they can get a fantastic rate of growth basically borrowing science, technology, and finance from America. BUT: Once they quit crawling, get up on all fours, and start walking, then they will face the fact that they have some serious problems: (1) Total suckage for a constitution. (2) Similarly for their political and legal systems and human rights, e.g., little things like freedom of the press. (3) Next to nothing in 'democratic traditions'. (4) A lot of filthy air and water. (5) A population with a quite old average age. So, once they are standing, their people will want to do things about (1)-(5). As a country, they will struggle. The struggles may become violent. On "One fine day" (I know, Japan, not China), they will get (1)-(4) solved; solving (5) will be harder. Then they will be about where America was in, say, 1950. As they move ahead, actually to do better than America they will have to do well with things that are new, with pushing the envelope, with making progress on new ground. Then they will begin to see the enormous advantages of political freedom, freedom to cut new ground in our research universities, free enterprise, freedom of the press, freedom in art, guarantees of freedom from an oppressive government, etc. They will still have the problem of a population with too old average age and a bad ratio of people to land and natural resources. Net, bet on the economy in China continuing to grow rapidly for some years, but don't bet on China actually beating America in any significant sense this century.
- haploid 15y ago
  You seem to think that economic and military strength have political freedom as a prerequisitie. I can understand why you'd believe that, since the "good guys" just happened to win WW2 and launch American hegemony. Well, 65 years is not a very long time. The Roman, the Ottoman, and the Persian empires all had arguably less free political systems than China does today, and yet that did not prevent them from dominating large parts of the planet economically and militarily.
espeed 15y ago
Right now, oil and commodities are transacted in US dollars so countries have to stock-pile dollars. When China becomes the dominant economy, this won't probably won't be the case for long. See this discussion from yesterday -- "Petrodollar Warfare -- AKA the "Oil Currency Wars" (http://news.ycombinator.com/item?id=2477659 http://news.ycombinator.com/item?id=2477659)
wiks 15y ago
http://www.cnn.com/video/#/video/world/2011/04/24/gps.fareed.take.china.us.cnn?iref=allsearch http://www.cnn.com/video/#/video/world/2011/04/24/gps.fareed...
reso 15y ago
We speak of Real-GDP, but the day when China overtakes the US in RGDP/capita is still a very long way off. Still, probably a good time to start learning the ol' Mandarin.
vessenes 15y ago
Unlike most other commenters here, I like this article and the general premise. I would be surprised if GDP in China increased so rapidly without also impacting PPP multiples, though. The article was a little light on this angle, but I would mentally adjust their number out to take into account the likely fact that increased GDP in China will continue to drive cost of living up. This pushes out the date a bit.
vorg 15y ago
Comparing the US and China "nations" doesn't make sense. A Chinese person can "become" an American, but an American doesn't become a Chinese.

69 points by pjy04 15y ago

> It’s a lesson we could learn more cheaply from the sad story of the British, Spanish and other empires. It doesn’t work. You can’t stay on top if your economy doesn’t. Kind of tongue-in-cheek - but that's a lesson I learned from playing Civilization. I know it's just a game, yadda yadda, but sometimes I do wonder how much of it translates into reality. E.g., if this was a game of Civ, China's domination would be pretty much ensured at this point: they have so many "cities" that their "production" output and "science" output will overtake anyone else's in short order. In fact, that's how I prefer to play the game often: just build minimal defenses to make sure my cities are not conquered, and invest in growth as much as possible. Sooner or later, I'm the 800 kg gorilla of the whole Civ map.

tlear 15y ago
In Civ with the current balance of power US would be launching an all out nuclear strike against China to win the game at this stage.
- pjy04 15y ago
  If you play Civ, you should really check out victoria II. Much more realistic http://www.paradoxplaza.com/games/victoria-2 http://www.paradoxplaza.com/games/victoria-2
  - Qz 15y ago
    Was wondering when I would see crossover between this board and those boards!
  - RobertKohr 15y ago
    No OS X support... :( I used to love Europa Universals 2. Looks like paradox doesn't value mac users anymore.
allenp 15y ago
I think the difference in the real world is one of quality. Quantitatively we may have the same or less number of factories or scientists, but the quality of our science and research is so much better I think it would be very hard for China to compete if things turned hot.
- SkyMarshal 15y ago
  I keep hearing this repeated, and it's completely false. Even if the Chinese educational system only turns out rote memorizing robots incapable of the kind of creative, breakthrough leaps of discovery the West prides itself on and will never evolve due to cultural momentum and restraints (which I don't buy either but that's a whole nother argument), being economically dominant will enable China to build world-class research facilities and import world-class talent. The US benefited from such a scientific talent immigration trend after WWII. The European theoretical physics community is benefiting similarly from LHC and the short-sighted cancellation of SSC. Any area of research that requires massive, long-term, blue-sky funding will be dominated by governments willing and able to provide it, and will attract the best talent from all over the world. The major problems China will face in this instance will be the language barrier and reticence of some scientists to work for a more authoritarian, censoring government. The former is easily solved, the latter is problematic but not insurmountable - even scientists have their price and plenty would convince themselves to work under such a regime in the exact same way Google did (change it for the better by 'engaging' it), especially when the alternative is a stagnant career and dead-end research due to lack of funding elsewhere. This conceit that many in the US and West have that the quality of our science and research is innate and unimpeachable is both ignorant and complacent. Where there's a will there's a way, and China certainly has the will.
  - allenp 15y ago
    I have no doubt China could build high quality centers of science and import high quality researchers - my only argument was that until this happens the sheer number of scientists in China is not a good way to measure their science production (it's just not apples-to-apples like in a Civ game).
  - 15y ago
yxhuvud 15y ago
Well, it is just that the english already won by domination back in the 19th century...
doyoulikeworms 15y ago
Is the world more like Civilization III or IV? From what I remember, the overhead of high city counts in IV can be prohibitively high. It makes more sense to scale vertically rather than horizontally. Unless, of course, you employ the State Property civic (apt!). Interestingly, China has been switching to the Free Market civic for the last couple of decades... More trade routes and more incentive to support corporations, but higher overhead for the huge city count. There's a reason why you go through revolution when you change civics.

keiferski 15y ago

Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and rising. So we won't be the top any longer, but we'll still be enormously dominant. So? Competition drives innovation. All the "America is doomed" folks act as if America is going to crumble to pieces simply because we are no longer the only gorilla in the room.

kokon 15y ago
But I think the implication is a lot more than just being the second. Once you're the second, you can't easily dictate anything anymore. Just like having multiple buyers, the seller has more options to sell the product.
mike-cardwell 15y ago
The danger comes when China has enough money to equal the US in military strength and decides it wants as much influence in World politics as America does. The rest of the World doesn't need that complication.
- narrator 15y ago
  The Chinese have not had a tradition of colonialism. They're just not as obsessed with controlling the world as the west is. They are assertive over neighboring areas that have been arguably part of China for a long time like Tibet, Taiwan, Macau and Hong Kong but that's pretty negligible compared to the global domination aspirations of the Soviets, the Axis powers or Colonial European powers.
  - tybris 15y ago
    They're working on it http://en.wikipedia.org/wiki/Neocolonialism#Sino-African_relations http://en.wikipedia.org/wiki/Neocolonialism#Sino-African_rel...
  - deleted 15y ago

edw 15y ago

Why is this story here? It should be posted to Digg and Reddit, home to all the people awaiting the Ron Paul Revolution and are posting stories about peak oil and the need to return to the gold standard. Unless, of course, the content of this article is somehow going to influence your business plans or YC application or your Ruby or JavaScript code. (No, I didn't think so.) Butterfly flaps wings Adjust your business model The U.S. is doomed

mattee 15y ago

We would remain, however, the most technologically advanced nation. Plus, GDP per capita would remain far higher. The majority of economists consider GDP per capita the most important thing when determining the wealth of a nation.

knowtheory 15y ago

Oh yes, lets parade out yet another rising Chinese menace story. Are we counting the cities worth of empty condos in the Chinese GDP? How exactly did the IMF arrive at these numbers? Is there external confirmation of government stats? There are definite signs that there's a bubble waiting to pop in China, just as it did in the US, so i view even analyses by the IMF with some skepticism if they're based on government reporting, given that the government of China has both the means and the incentive to present itself as a growing economic power. How about we hold off on the sound and fury until 2016, mmkay?

patrickk 15y ago

Somehow I doubt these predictions are going to bear out. History always repeats itself. In the 1980s it was Japan that was going to crush the American economy. For the last twenty or so years the Japanese economy has been flat (it's still the 3rd biggest in the world however). Japan tried to boost the economy with massive expenditures in it's infrastructure, to no avail. Compare that to China's approach of building high speed rail networks that get cancelled, and to build huge 'cathedrals in the desert' - cities that are overpriced by the government, who refuse to let the price to be dictated by the market (which is what would happen in a true capitalist system). The result is that most locals are priced out of the market. The reason that the cities are being built in the first place is to drive growth figures. Not having any oversight may result in some dramatic revelations about China's supposed growth in the coming years. http://news.bbc.co.uk/2/hi/8691083.stm http://news.bbc.co.uk/2/hi/8691083.stm http://www.bbc.co.uk/news/business-11748644 http://www.bbc.co.uk/news/business-11748644 http://www.sbs.com.au/dateline/story/about/id/601007/n/China-s-Ghost-Cities http://www.sbs.com.au/dateline/story/about/id/601007/n/China... Related HN discussion: http://news.ycombinator.com/item?id=2386584 http://news.ycombinator.com/item?id=2386584 EDIT: Added link EDIT 2: Typos

SkyMarshal 15y ago
Japan has never had more than one half the population of the US. For Japan to have become a larger economy it would have required the average Japanese citizen to be around twice as productive as the average US citizen. They're productive, but not that much. China has four times the population of the US. They're already the world's second largest economy based on the development of about 350-400 million people in the eastern section of the country alone, and they still have another ~800 million to go spread through the rest of the country. While there are significant obstacles to further developing countries the size of China and India, they have untapped potential left that Japan didn't. General comparisons to Japan aren't valid here.
- ChuckMcM 15y ago
  I believe the insight the author was after here was not a general comparison of Japan to China, rather that China's "growth" has a component to it which is artificial. That artificial growth comes from reporting GDP on building things that nobody uses (like Cities). Conversely, like a large private corporation which doesn't have to reveal costs in any general accounting rules kind of way, China has the ability to create a view of their economy which is 'untrue.' So put another way, the author posits that in a market economy the creation of a new city would be done by actors who were themselves creating more economic output as a result of productivity gains from having city infrastructure. Thus economists see new building as a leading indicator of economic growth. However if you simply spend a billion dollars to build a high rise office tower without any tenants or even a prospect of leasing it out, the 'leading indicator' aspect of that data point is completely wrong. The building will sit there empty, generating no economic growth whatsoever. There are hints that China is manipulating its figures in just that way. The bigger challenge for China is that in the eastern part of the country the standard of living is growing much more rapidly than it is for people living in the western half of the country. The last time that happened Mao Tse Tung used it to his advantage to overthrow the incumbent government.

weavejester 15y ago

"According to the IMF forecast, whomever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy." Technically this has already happened, as the EU has a larger combined GDP than the US. It's also not too surprising. For it's land area, the US is very sparsely populated, and 350m people are not going to have the same economic purchasing power as 1000m people, assuming the latter group can catch up in terms of infrastructure and technology with the former group.

billybob 15y ago
Is that a fair comparison? The EU is still made of up sovereign countries with their own economic policies.
- Apocryphon 15y ago
  And for all of the troubles in California and other states, I'm not sure if any of them required the sort of bailouts that the PIIGS needed.
- silvestrov 15y ago
  They are only economical sovereign within strict limits. Greece might be able to tell you a bit about recently having to implement unpopular economic policies demanded by EU.
- weavejester 15y ago
  The EU is a single market, and economic policies are governed to some degree by Brussels. I guess it's open to interpretation, but most sources I've seen describe the EU as a single economy, including the CIA world factbook.

Cherian_Abraham 15y ago

Remember that China holds a lot of our debt. You will not see much public chest beating from China over this because of that fact. Both are equally vested in each others success as the other. China does not want value of the US bonds to plummet and US needs a stable manufacturing partner. At least for the foreseeable future, this economic and political two-step will continue. However this does present serious doubts about the irrational exuberance in the strength of our markets for long term. It is hard to gauge China and its intentions. I am not saying that US has moral supremacy over China, but that China seems to be doing now what US used to do, for its own stability sake, twenty years ago. It is preparing to be the economic behemoth, despite the troubles it face in real estate and regionally. The next twenty years should be pretty interesting. Edit: I wanted to add a reference to this paper out of the Pentagon from two Pentagon top level staffers who assert that we should reduce our military spending and reinvest it in our youth. A very prescient analysis of where United States is heading, in the world. I wanted to add it as its own HN submission, but was not sure if it would be well received. Here is the link to the pdf: http://www.wilsoncenter.org/events/docs/A%20National%20Strategic%20Narrative.pdf http://www.wilsoncenter.org/events/docs/A%20National%20Strat...

espeed 15y ago
I posted info on the Y Article yesterday: http://news.ycombinator.com/item?id=2478908 http://news.ycombinator.com/item?id=2478908
- Cherian_Abraham 15y ago
  I rest my case :)
  - espeed 15y ago
    However, yesterday these got traction... "Warren Buffett is now betting against the US dollar" (http://news.ycombinator.com/item?id=2476584 http://news.ycombinator.com/item?id=2476584) "China Proposes To Cut Two Thirds Of Its $3 Trillion In USD Holdings" (http://news.ycombinator.com/item?id=2479432 http://news.ycombinator.com/item?id=2479432)

NY_USA_Hacker 15y ago

Yes, America has the worst economic system there is except for all the others that have been tried. China? You GOT to be kidding! They are run by a one party dictatorship. They run essentially a centrally directed, command economy. They are still so poor that on average they have a tough time even getting enough rice for their people. So, starting from where they are, they can get a fantastic rate of growth basically borrowing science, technology, and finance from America. BUT: Once they quit crawling, get up on all fours, and start walking, then they will face the fact that they have some serious problems: (1) Total suckage for a constitution. (2) Similarly for their political and legal systems and human rights, e.g., little things like freedom of the press. (3) Next to nothing in 'democratic traditions'. (4) A lot of filthy air and water. (5) A population with a quite old average age. So, once they are standing, their people will want to do things about (1)-(5). As a country, they will struggle. The struggles may become violent. On "One fine day" (I know, Japan, not China), they will get (1)-(4) solved; solving (5) will be harder. Then they will be about where America was in, say, 1950. As they move ahead, actually to do better than America they will have to do well with things that are new, with pushing the envelope, with making progress on new ground. Then they will begin to see the enormous advantages of political freedom, freedom to cut new ground in our research universities, free enterprise, freedom of the press, freedom in art, guarantees of freedom from an oppressive government, etc. They will still have the problem of a population with too old average age and a bad ratio of people to land and natural resources. Net, bet on the economy in China continuing to grow rapidly for some years, but don't bet on China actually beating America in any significant sense this century.

haploid 15y ago
You seem to think that economic and military strength have political freedom as a prerequisitie. I can understand why you'd believe that, since the "good guys" just happened to win WW2 and launch American hegemony. Well, 65 years is not a very long time. The Roman, the Ottoman, and the Persian empires all had arguably less free political systems than China does today, and yet that did not prevent them from dominating large parts of the planet economically and militarily.

espeed 15y ago

Right now, oil and commodities are transacted in US dollars so countries have to stock-pile dollars. When China becomes the dominant economy, this won't probably won't be the case for long. See this discussion from yesterday -- "Petrodollar Warfare -- AKA the "Oil Currency Wars" (http://news.ycombinator.com/item?id=2477659 http://news.ycombinator.com/item?id=2477659)

wiks 15y ago

http://www.cnn.com/video/#/video/world/2011/04/24/gps.fareed.take.china.us.cnn?iref=allsearch http://www.cnn.com/video/#/video/world/2011/04/24/gps.fareed...

reso 15y ago

We speak of Real-GDP, but the day when China overtakes the US in RGDP/capita is still a very long way off. Still, probably a good time to start learning the ol' Mandarin.

vessenes 15y ago

Unlike most other commenters here, I like this article and the general premise. I would be surprised if GDP in China increased so rapidly without also impacting PPP multiples, though. The article was a little light on this angle, but I would mentally adjust their number out to take into account the likely fact that increased GDP in China will continue to drive cost of living up. This pushes out the date a bit.

vorg 15y ago

Comparing the US and China "nations" doesn't make sense. A Chinese person can "become" an American, but an American doesn't become a Chinese.