The Chinese Take Over

What will happen when China recovers from this current economic malaise first and overtakes the US as the largest functioning economy in the world? I make a prediction (based on nothing but a gut feeling) that by 2030 China will surpass the US as the largest economy in the world.

I know that this is a bold prediction. But I was correct about a much easier one – the US invasion of Iraq. At that time I wrote to the US Embassy and asked them to pass on a message to Bush that he would live to regret his invasion, that it was wrong – whatever the motives. I never got a reply - which I never expected anyway.

This time I base my prediction on trade and population. The US has about 305 million people and China about 1.3 billion. Much of the US’ previously unassailable position was based on intellectual property, manufacturing and exports. Now their exports are declining – they have ceded much of their manufacturing might to the Chinese – who make most of the world’s electronic and white goods and clothing. And the Chinese are learning fast so their intellectual capabilities are expanding rapidly. The Chinese also control much of the worlds cash reserves (the US has none!) and cash, as always, is king. In fact the Chinese are bolstering the US economy by holding trillions of dollars worth of US Treasury bonds.

No one likes what the Chinese have done to Tibet, nor how the communist regime tries to control the general population – it tries to control access to the internet, it controls the number of children any family may have (which is causing a huge gender imbalance). But the Chinese Government does have an agenda – they wish to raise the standard of living of their people as quickly as possible.

I also base my prediction partly on an article written many years ago now by Lt General John Glubb, known also as “Glubb Pasha” (a British general who commanded the Arab Legion before and after the Second World War) for Blackwood, an British monthly magazine. He called his article “The Fate of Empires” in which he determined that the average empire survived for 250 years. He went back in time to the ancients and followed the creation and fate of empires through to the 20th Century.

Generalising a great deal one could say that the British Empire lasted from about 1750 to about 1950 – say 200 years. Glubb stated that the Americans were slightly different in that they never had much of an ‘external’ empire and that theirs was rather an ‘internal’ empire. The American continent was so rich in resources, internally, that they never (until recent times) had to look abroad for resources to feed their economic growth. So now taking 1776 as the start of the American ‘empire’ and, while they are obviously not finished yet, taking my, predicted, date of 2030 as a cut-off, that makes 254 years.

No matter when the American’s lose their control of the world economy – and they will eventually, they will find it difficult to play second fiddle to anyone. Particularly if they are treated the way they have treated others over the years.