Thursday, December 20, 2012

China's Economy Will be Bigger than Ours Soon ... But We'll Still Be #1 in all the Things That Matter Most ... And We'll Be Financially Sound and Energy Independent

As the old saying goes, the more things change, the more they stay the same, at least in some respects.

Things are always changing, but the basics remain the same.

Let's talk about the size of China's economy in relation to the prospects for our own U.S. economic future.

China has more than four times as many people as the U.S. And before 2030 its overall economy is projected to be bigger than ours. But that's OK. In fact, it's actually quite good for our citizens and way of life with respect to opportunity as the world's population grows and market based economies become the norm.

Because we've some really big things going for us right here in the U.S. as well.

By 2030 we will have become energy independent and also have available a greatly expanding worldwide middle class that will be able to buy our U.S. produced world class competitive goods and services.

So all in all, it looks like a potentially great future is in store for America's citizens. Our private sector led economy will remain the envy of the rest of the world, and our individual citizens will still enjoy by far the highest standard of living the world has ever known. That sounds like a winning cpmbination to me.

China Will Have Largest Economy summarizes a recent report foretelling the shape of the world's economies by 2030:

"China will be the world's largest economy as Asia surpasses North America and Europe by 2030, according to a new U.S. National Intelligence Council report . . . .

Overturning more than two centuries of Western global dominance, the U.S. and European nations likely will share power with dynamic emerging economies, according to "Global Trends 2030: Alternative Worlds." . . .

"Asia will have surpassed North America and Europe combined in terms of global power, based upon [gross domestic product], population size, military spending, and technological investment," the report said.

And while the U.S. will likely remain "first among equals" amid the new global power architecture, the Department of National Intelligence believes China's economy will likely overshadow the U.S. a few years before 2030.

The 2007-2008 financial crisis accelerated a tectonic shift in power from the U.S. and Europe to emerging economies, stunting U.S. growth and sparking a series of sovereign-debt emergencies in the euro zone.

Over the next two decades, the intelligence report predicts that European, Japanese and Russian economies will likely continue in "relative declines," while China, India, Brazil and regional players such as Colombia, Indonesia, Nigeria, South Africa and Turkey will become especially important to the global economy.

Global demand for energy is expected to grow by 50% as populations and the middle class expand, but the U.S. could become energy independent by 2030 as it taps natural-gas resources."

Summing Up

As long as our people are free, our private sector is free, our system of education is world class, our borders are open, our government is limited and our military is strong, we'll still be #1 in all the things that matter most.

And long before then we'll have rediscovered the secret of the wisdom of living within our means, both individually and as a nation.

It will take us some time and much hard work as a nation to convert all this opportunity into reality, but nothing worthwhile comes easy.

At least that's my take.

Thanks. Bob.

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