I remember around 2008/2010 it seemed to be a consensus among many people that the Chinese economy would be the largest in the world very, very soon. I think some estimates were even saying by 2016. I just looked it up today and this is where it stands:
1 United States 18,558,130 (Thanks Obama!)
2 China 11,383,030
The gap hasn't changed much in the past couple of years, and they definitely won't catch us by 2020 at this rate. Was all that talk overblown? Or is China still on track to be the worlds largest economy? What do you guys think.
(I know if you go by current growth rates, they will be the largest eventually. I'm more asking if it's sustainable)
If you asked the question, "Which is the richest nation?" once every 500 years starting, say, 4000 years ago, the answer to the question would have been "China" every time except the last two times. In the early 1500s the answer was probably Spain and in the early 2000s the answer was the United States. Of course China will surpass the US.
But they'll do it on their own terms. I remember reading 20 years ago that in 20 years China's GDP would surpass that of the US and I thought then it was a little far-fetched. Even ten years ago I said as much on this forum. I don't agree that it's "fearmongering" but rather mediocre investment advice. I won't call it bad investment advice. If you find a solid chinese firm that sells good stuff then by all means invest, but the huge growth rate that China experienced after they were honored with the "most favored nation" sobriquet by the Clinton administration in the 90s wasn't sustainable. They don't have the messiness of democracy, so that gives them an edge, but their internal demand is nearly saturated.
The prediction that China will again be the richest nation on earth is a safe one. No one goes out on a limb when he makes that prediction. The prediction that it'll become so in a certain year is useless. No one knows when that will happen, and frankly it doesn't matter. If you see a good opportunity and want to gamble on it, then gamble. There's no guarantee that your investment will pay off, but you can't make megamoney by playing it safe.
