Can China Overtake Us as the Economic Superpower by 2040
China will overtake the United State of America as the Economic Superpower of the world by 2040. Do you agree with this statement? Please explain your view.
I don’t agree that China will overtake United State of America as the Economic Superpower of the world but on the other hand, I am not dubious that China’s total GDP could be comparable to that of United States of America by 2040.
Although with China’s government harsh rule of the “one-child policy”, their population is still huge. Berry (2005) commented, with China’s huge population, it does have an advantage of burgeoning labour forces as an ingredient to its total GDP but it is still a poor country with GDP per capita. For example, having China’s total GDP remaining the same at $12 trillion at an increasing population, instead of $60/hr for $12 trillion/200billion, it will be $50/hr for 12trillion/300billion. Not only that, having surplus of labour forces also shows that China must have the rapid movement of workers from rural agriculture into higher productivity jobs in industry and agriculture. This had been completed by U.S more than half a century ago.
Another biggest challenge for China is to have currency appreciating on their Yuan. As exerted from ANU E.Press (2010:154),
Leaders in the United States would like renminbi to appreciate significantly and quickly to encourage an expansion in US exports and employment. Chinese leaders, however, regard the pressure to revalue the renminbi and various protectionist trade policies from the west as unfair, and they believe they threaten China’s development.
When China’s currency appreciates, it means that the Chinese will be better-off and able to spend more that makes their imports more competitive and exports more costly. Parkin (2009) define net exports are exports of goods and services minus imports of goods and services. A lower price on the imported consumption goods and services and a higher price on their exported consumption goods and
I don’t agree that China will overtake United State of America as the Economic Superpower of the world but on the other hand, I am not dubious that China’s total GDP could be comparable to that of United States of America by 2040.
Although with China’s government harsh rule of the “one-child policy”, their population is still huge. Berry (2005) commented, with China’s huge population, it does have an advantage of burgeoning labour forces as an ingredient to its total GDP but it is still a poor country with GDP per capita. For example, having China’s total GDP remaining the same at $12 trillion at an increasing population, instead of $60/hr for $12 trillion/200billion, it will be $50/hr for 12trillion/300billion. Not only that, having surplus of labour forces also shows that China must have the rapid movement of workers from rural agriculture into higher productivity jobs in industry and agriculture. This had been completed by U.S more than half a century ago.
Another biggest challenge for China is to have currency appreciating on their Yuan. As exerted from ANU E.Press (2010:154),
Leaders in the United States would like renminbi to appreciate significantly and quickly to encourage an expansion in US exports and employment. Chinese leaders, however, regard the pressure to revalue the renminbi and various protectionist trade policies from the west as unfair, and they believe they threaten China’s development.
When China’s currency appreciates, it means that the Chinese will be better-off and able to spend more that makes their imports more competitive and exports more costly. Parkin (2009) define net exports are exports of goods and services minus imports of goods and services. A lower price on the imported consumption goods and services and a higher price on their exported consumption goods and
Bibliography: ANU E.Press (2010): China: The next twenty years of reform & development, Australia: ANU E.Press Berry, Bloomberg’s John M. , 2005, Will China Grow Fast Enough to Overtake the U.S? , Economist’s view, http://economistsview.typepad.com/economistsview/2005/12/will_china_grow.html [22 Nov. 2010] Blankert, Jan Willen (2009): China-rising: will the west be able to cope? : the real long-term challenge of the rise of china, Singapore: World scientific Publishing Co.Pte Ltd Lardy, R (1994): China in the world economy, USA: Institute for international economics Parkin, Michael (9th ed.) (2009): Economics, USA: Pearson Education Prasad, Eswar (2004): China’s growth and integration into the world economy: Prospects and challenge, USA: International Monetary Fund