How Can We Stop The Rise of China?

• The last visit I made to China the locals were extremely racist towards me. I was accompanied by two Black Americans friends who were treated better than I was. I'm White American and everyone, from every ethnicity, has treated me better than my two Black American friends. I'm not trying to be racist. The Chinese view White Americans as inferior to us. They even call us "White devils" in their language. ______________________________________… CNN Money ran an article the other day with a title that made me want to read it:“You Have 7 Years to Learn Mandarin”. Oh really? Why so you might ask? My original thinking is because the Chinese business (and therefore legal) market would become too saturated with ex-pats and half-pats to break in. I was wrong. Instead, the article talks about a prediction that China will be the world’s economic superpower by… 2015. 2015? You got to be joking. But that’s what CNN is peddling to an unsuspecting public: Back in 2001 when the International Olympic Committee chose Beijing as the site of this summer’s games, the event was meant to mark China’s debut as a player on the global economic stage. But a recent study by the economist Angus Maddison projects that China will become the world’s dominant economic superpower much sooner than expected – not in 2050, but in 2015. While short-term investors are already cashing in on China’s growth by playing the global commodities boom, smart long-term thinkers are contemplating what happens when China matures from an exporter of cheap goods to a competitor in sectors where the U.S. is dominant – technology, brand building, finance. China has almost wiped U.S. makers of low-value items like toys and socks, but by 2015 it may threaten Apple (AAPL, Fortune 500), J.P. Morgan Chase (JPM, Fortune 500), and Procter & Gamble (PG, Fortune 500). It will increasingly influence the S&P 500 and the mutual funds in our 401(k)s. So it’s worth looking at how that will happen, what it means, and what anyone can do in the seven years before the baton is passed. Just using the exchange rate to convert China’s GDP into dollars isn’t helpful in comparing the two economies, because China controls its exchange rate; by that method, China’s economy might not pass America’s for decades. Exchange rates apply only to tradable products and services; they aren’t very useful in valuing nontradable goods in a country like China that is much poorer than the United States. So we need some way to compare the real value of China’s economic output with America’s, and economists have developed one. It is called purchasing power parity. Angus Maddison’s forecast (which uses purchasing power parity) isn’t built on outlandish assumptions. He assumes China’s growth will slow way down year by year, and America’s will average about 2.6% annually, which seems reasonable. But because China has grown so stupendously during the past decade, it should still be able to take the crown in just seven more years. If that happens, America will close out a 125-year run as the No. 1 economy. We assumed the title in 1890 from – guess who. Britain? France? No. The world’s largest economy until 1890 was China’s. That’s why Maddison says he expects China to “resume its natural role as the world’s largest economy by 2015.” That scenario makes sense. China was the largest economy for centuries because everyone had the same type of economy – subsistence – and so the country with the most people would be economically biggest. Then the Industrial Revolution sent the West on a more prosperous path. Now the world is returning to a common economy, this time technology- and information-based, so once again population triumphs.

• Answer:

  Thanks for the interesting prediction that it is 2015 and not 2050 that China may take over as No. 1 economy. Thanks for the interesting fact that China was No.1 in 1890 before the US, thought it was Britain. As much as you may say "not trying to be racist", I think you are. From the way you write, I am sure you think that you are superior than your 2 Black American friends (I wonder why do they want to be your friend in the first place). And I am guessing here that it must have been the way you carried yourself that you had not been as welcomed as your 2 American friends (you must been very aloof and pompous). Your 2 American friends probably had better manners and respect for the people they met in China than you, they probably tried to learn and know more about the Chinese culture. They probably do not expect the Chinese to Kowtow to them. So anyone would have guess that they are more welcome than YOU! We SEA nations do not kowtow to you (European/Americans, white you mean?), but we respect that your country has many things that we like to learn. YOU (as in YOU not your country) are not better than US (SEA nations), as we do not see that there is anything that we need to learn from YOU (definitely not YOUR arrogance nor attitude). Perhaps you might have experienced or hear some arrogance from the people in China, but it does not represent the majority of them and definitely not their government. It is probably the minority of the Chinese who are retaliating as they had felt much deprived and now feels stronger, retaliating to the minority of people like yourself (I am sure your attitude does not represent the majority of your country). And so I would say give respect and you will earn respect in return. Let the world evolve, be it US as No.1 or China or perhaps India or Mexico. All countries should live harmoniously and learn to love/respect each other.