This was all over the news on yesterday.
For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.
And it’s a lot closer than you may think.
According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.
If you read through the story, you will read about some experts saying it won’t happen until the 2020s – and China misreports the value of its currency. So there is some doubt. And this article, and mainly the headline, is put out there to get a certain reaction in my opinion.
I have a hard time believing this will happen – at least in this short of time frame for a couple of reasons.
1- China’s economy has grown mainly based on what America consumes. China exports a lot of products to America – look at your labels in Wal-Mart to see where the products are made. So if America declines, China will decline.
2- The big reason for America’s growth is capitalism and a large and free middle class. China’s government and social structure is such that capitalism will only go far before it is pulled back by the government. There will not be a large and free middle class society in China. Why? Because a large and free middle class does not need government – and if that is the case, the middle class gains power and the government loses power. China’s government will not allow that to happen, so growth will only go so far.
If China overtakes us – it will be more about America’s decline and China’s ability to export their goods to other countries. Under normal circumstances, that won’t happen for awhile.