How long do you think it will be before China replaces the US as a superpower?

Question

This is not something I want, it just seems inevitable. Our dollar is getting weaker and weaker, thanks too the constant "monetizing" of our massive debt (which grows by $1 BILLION/day) among other things. Right now the Chinese yuan is tied to the US dollar, so right now, it is good for the Chinese to import the $3 pack of tube socks to Wal-mart...but what happens when they let that yuan float on it's own...they'll do it, but when? If they were to do that, then we are at their absolute mercy and they can charge us anything they want for those tube socks (or food, clothing, EVERYTHING) because we do not have the manufacturing capabilities to support our population...we've shipped all those jobs overseas and torn down the factories. What are we going to do then? And is anybody else worried about it besides me?

Answer 1

not long, definately within the next generation. the US has been declining in power since the kennedy assasination, and the dollar is failing (almost $2=£1 for the first time in a 1/4 of a century), the cheap labour and productivity means that it is making so much money while America is doing all those things you just said. the fall of the west is inevitable, while the far east and india, are taking over. luckily the US will probably be like todays Britain or France and have moderate market dominance, but also the middle east has the potential to rule the world, but they are to busy with religion and killing eachother, not to mention us, to do anything about it

Answer 2

You're packing in an awful lot of misconceptions and false fears into that query. China may in time become a superpower but they certainly won't "replace" the US. China will never have the cultural influence or the political-historical ties that America has had worldwide in the past century. People the world over, even in North Korea to large degree, wear American ballcaps, watch American movies, use American software, eat at American fast food restaurants, try to learn English, and complain that America intrudes on their precious culture. Hard to imagine China ever having an influence remotely like that. Chinese people hero-worship Bill Gates. How many people outside of China can even name a Chinese business leader?

Our Brit friend is wrong. It's unlikely that China's total aggregate economy could catch up to the US's in anything less than 50 years or so. It may take a full century. Maybe never -- in the future China will be a shrinking country while the US is still a growing country.

Exchange rates for the dollar versus other currencies float around for a million reasons and we go through cycles of weak dollar and strong dollar. It is not a sign of any decline of the US; it is not caused by our government debt; and if you bothered to learn some economic history you wouldn't worry about it.

Your fears about our debt are quite unfounded: we are not "monetizing the debt" - that phrase does have a meaning (the treasury creates new bonds and sells them to the Fed instead of to the public), but that is not happening today in US. In fact the US debt load is mild, manageable, not threatening, and the deficit is quickly shrinking. The debt:GDP ratio is actually shrinking. (Hint: before getting swept away by the size of the debt, you should contemplate the enormous size and income-generating ability of the economy. Keep things in context.)

Your fears about trade are completely unfounded. We've outsourced some manufacturing to China to a degree that is helpful to us and makes us wealthier. But we are not "at their mercy" -- if conditions somehow made Chinese imports too expensive (not likely, as trade simply does not work the way you seem to think) then that means US companies would again find it worthwhile to reopen or rebuild factories to make those things -- or just relocate manufacturing to some other country.

But the only likely result of the Yuan revaluing is that it might slightly affect the trade balance in our favor.

Answer 3

Economics teaches us that the economy is a complex balancing act that changes constantly as variables change and evolve. China does have cheap labor that has been underutilized for centuries and now the world is harnessing some of that; but just like every other economy in the world there will be growing pains and things will not always look so peachy for China. Just remember when Chinese labors wages start to rise that investing in factories there will start to look less and less attractive. So things can only stay as they are if China artificially keeps its wages low, which to some extent it is already doing through various policies. Sooner or later though China will become more consumer driven like the US and a new balance will be found. Also, realize the other country close to being a super power is Japan and trust me when I say they greatly prefer having the US as top dog.

Answer 4

Very soon, if it hasn't already. But on the other hand, China's GDP growth is largely driven by supply rather than domestic aggregate demand. It's been this way for the past at least 20 years. From another point of view, China's growth is in large part due to it high savings rates. The country's been running a very large current account and trade balance surplus for a while now. Its weak currency sustained this undoubtedly. If the rest of the world still allows the Chinese central bank to set an artificial currency value rather than appreciating it as it should, China still has a pretty good run in the next few decades. Otherwise, China wouldn't have a large enough domestic demand to meet its large aggregate production. I reckon the growth rate in china is going to slow down in the next decade, bcs the economy is maturing. But i highly doubt its going to be in any way stagnant, at least in the first half of this century.

Answer 5

Giving a specific time frame is difficult. As the way things are now, it is likely not to be for 50 years at least. But if the gov't suddenly started sweeping reforms of capitalism it could happen a bit faster. Right now, China is good at production but not innovation. Innovation is the only strong point in the US right now. China will always beat the US on production costs eventually (once they copy the technology). Although, the same thing that has happened to the US might happen to China...high standard of living. Eventually as more industry is implemented, people's salaries will rise. It could be to the point that their cost of production, salaries, exporting may not be as profitable as it is now. While you are worried about China, India may sneak up and surpass China and the US. There are many well educated young people in India with technical backgrounds. Have you ever called tech support for a computer? You will likely end up talking to an operator in India.

Answer 6

China will become as powerful economically as the United States in perhaps twenty years if current trends continue. However, China will not replace the United States, not least because its power is limited to a comparatively small geographical area, with consequently limited access to resources. Not least, China is facing a huge water problem.

My guess is that the twentyfirst century will see economic power shared by a number of nations including India and Brazil as well as China and the United States.

You are quite right to be concerned about US debts. I am responding from the UK, and the US should learn from our experience. Britain was ruined as a power because it fought wars, in particular the First World War, without the economic base to pay for its military.

Answer 7

There are many factors involved in what you just said. The GNP of China is far lower. Plus they have a large bureaucratic budget (remember they are a communist regime and therefore the state pays for much more than in a democratic society). Moreover, China has large expenditures for the military and are still behind in that technology.

In short, they may be able to charge us for tube socks, but they still need raw materials (especially oil) from other countries. They are just growing as an industrial society.

Answer 8

Its not something we should worry about. Its not like it will affect our daily lives. But globally, the u.s. has a huge amount of debt, and it will catch up - the question is when. But technologically we are far more Superior than them. They still have 3rd world states, and they're basic weaponry are AK-47's. Our military is far more capable than they will ever be. All we need to do is get a good president!!!! it will make all the difference regarding the debt.

Answer 9

China will not replace the US as a superpower, but it will become one if it is not already. The last 2000 years have been dominated by the western nations. That is rapidly changing with Asia going to be on par with the west and matching them with ecomomic and military power.

Answer 10

At the current expansion, China may take over in 15-20 years.