When Will China Overtake USA as a GLOBAL LEADER

They probably won’t ever. Not for the reasons you think. China will pass the US in nominal economic size pretty soon, probably between 2020–2025. Even if that doesn’t happen until —say— 2030, it’ll still happen. But that’s not enough to make a hegemony and I’m not sure that China even wants that. Even when China passes the US in GDP, it’s GDP PC will still be a lot lower than the US (and they will want it to keep growing).

The Chinese government has maintained a pretty clear path to economic dominance and I think they have made it clear that they will do pretty much anything to keep the economy growing. There’s a weird glass ceiling in economics that plateaus out GDP PC (nominal) at around $20,000 and it’s a hard barrier to break. (not impossible, but hard.)

So the deal is that China wants its economy to continue growing for the foreseeable future. It wants this because the status quo (the single party state) to continue without any political upheaval. To do that, you have to have happy, well-fed citizens who feel like their lives are improving. It’s fun to make fun of “decadent Americans”, but a tiny drop in GDP in the US has resulted in a political upheaval this year like no time since the FDR administration. A luxury, once obtained, is normalized. Once a luxury is normalized, it becomes indistinguishable (emotionally) from a necessity. The Chinese government knows this and wants to continue improving the lives of its citizens.

There’s just one problem. The previous leadership in China has obsessed about heavy industry. The problem with that is that they now see how this isn’t the best idea. Not only is the country heavily polluted (and getting worse) but we are a decade away from some horribly disrupting technologies that look to put a LOT of manufacturing and textile workers out of their jobs. To stave off the same threat to its economy as the US, Japan and the EU, China will have to draw heavily on its tax base and shift a LOT of resource around to make the people happy.

How will that go? Nobody knows. We’ve never been to a place like this before in all of history. Past economic revolutions shifted manpower and created wealth that cycled back into the economy, raising the mean standard of living while moving workers to different sectors. This revolution ELIMINATES sectors entirely. It’s very hard to imagine how technology that puts almost all people out of work while not creating some new, never-before-seen new industry to employ them. For the past 200 years, people have largely worked in very similar industrial sectors — they simply worked more in one than another and shifted with the flow of technology.

·         Farming

·         Manufacturing

·         Construction

·         Textiles

·         Shipping

·         Loading/unloading.

·         Mining

·         Sales (including retail)

If we went into the Wayback Machine to 1825, we’ll see a disproportionate number working in farming and a lot less in manufacturing. But nevertheless, these sectors employed the VAST majority of people. Whether they were delivering by horse and buggy or by tractor-trailer, the industry sectors have existed for centuries.

Now add in automation to all of these. Automated farming. Automated manufacturing. Automated textiles. Automated shipping. Automated loading. Automated mining. What’s left? Health care, education and hospitality, all of which can have at least a big chunk automated.

Even if you work in that super-special industry that needs your super smart brains, there’s no such thing as a music-based economy or Amazon.com-based economy. Just doesn’t work like that. Most of humans work in these fields and most of Chinese workers will be threatened EVEN IF they are not replaced because the people they sell to (Americans, Japanese, Australian, Canadians, Americans, Brits and EU-ers will be out of work).

By the time China has the means to be a global hegemony, I submit that the concept will be out of fashion. I think we’re scooting along quite rapidly to a place none of us quite know how to resolve in our head, but we know we’re going there. Even if we don’t get there until 2050, we will get there (provided we don’t wipe ourselves out). Neither China nor the US will be hegemonies after we all find 2/3 of our workers out of jobs.