Lots of talk these days about the rise of China and how they are about five years away from eclipsing our spot as the biggest world economy. Gaming this out a bit, what exactly are we concerned about?
Economically, I see two main possibilities:
1) They are going to have lots of money and will likely buy some of the things we make.
2) They are going to make cool new things and we will choose to buy them.
So far so good.
Politically you could imagine China taking this newfound wealth and plunging back into neo-communist expansion. But can you also imagine China’s new entrepreneurs standing by while some old bureaucrats plunge the country into war?
They are going to take some good jobs. Just as Honda and Toyota took jobs and money from Detroit. But that shift also revitalized manufacturing productivity worldwide and created this country’s second largest trading partner.
Some feared Europe’s ascension, but today it their faltering that’s causing political fear and economic hardship. If the situation were changed and China instead of Europe matched our GDP, then China reverting to its GDP of today would surely cause similar economic disaster. Yet we fear the opposite – that over the next five years China will grow it’s GDP to match ours.
Silicon Valley “steals” jobs from Seattle. Students in Boston make college admission harder for my kids. Tennessee “steals” manufacturing jobs from around the country. But do we want any of those things to stop?
More is more. It’s not a zero sum game. The rise of China is scary, while debt trouble in Europe sends markets reeling. Maybe we’re worrying a bit too much.