patrick.net

Nomograph says

So what if the sheer size of China’s economy passes us one day? They have a population of around 1.3 billion people, while the U.S. population is about 300 million. They have over four times as many people, shouldn’t they have a bigger economy than the U.S.?
Let other pens dwell on guilt and misery — Jane Austen

Not necessarily, it is not so much the size of your population that matters, but how you use it.

I think it is Ironically Cute, that in the same week.
That Track touters in this country would talk out of two sides of their butts.
On one hand the veneer facade of China's economy is cracking, and is exposing a battered and tattered RE market. Where the Chinese economy has been pretending that there has not been a Global melt down over the last 4 years. While banks in the US and in the Eurozone has been bent and stretched to the four corners of the market, China has just been printing money and building entire Cities. Which would be fine, but then no one in China can afford to live in the fucking things.

Do any of you clowns pay attention to the Shit, or do you all just Okeydoke every fucking thing our self serving financial community tries to sell you?
You can't have a country poised to take over the world, when the citizens of that country can't even afford to live in the modern towns being built in that country. You just can't.

That's more indicative of a facade than a thriving economy poised to dominate the world.

Seriously, China and India will be the global powers of this century! They will have worldwide impact as we did in the last century. Time changes things every thing. No country can be super power forever. History is the witness.

bubblesitter says

Seriously, China and India will be the global powers of this century! They will have worldwide impact as we did in the last century. Time changes things every thing. No country can be super power forever. History is the witness.

Plus they don't waste their national dollars on imperialistic ambitions. America, Germany, Britain, France, Rome, all hegemonies who ended when spread too thin.

burritos says

Plus they don’t waste their national dollars on imperialistic ambitions. America, Germany, Britain, France, Rome, all hegemonies who ended when spread too thin.

Are you sure about that? From the taipeitimes:

Chinese aircraft carrier nears completion
http://www.taipeitimes.com/News/taiwan/archives/2011/04/12/2003500545

Expected to be renamed “Shi Lang,” after the Qing Dynasty admiral who conquered what is now known as Taiwan in 1681, the carrier has been undergoing modernization work at the port of Dalian since 2002. Although the hull was built in 1988 by the former Soviet Union, the vessel acquired by China did not include the electronic circuits, radars, antennas, engines or other devices.

terriDeaner says

burritos says

Plus they don’t waste their national dollars on imperialistic ambitions. America, Germany, Britain, France, Rome, all hegemonies who ended when spread too thin.

Are you sure about that? From the taipeitimes:
Chinese aircraft carrier nears completion

http://www.taipeitimes.com/News/taiwan/archives/2011/04/12/2003500545

Um... yeah, China already controls territory that wants independence (Tibet comes to mind), and has it's eye on Taiwan.

http://www.berkshirehathaway.com/letters/growing.pdf - similar concern by Warren Buffet a while ago.

ChrisLA says

http://www.berkshirehathaway.com/letters/growing.pdf - similar concern by Warren Buffet a while ago.

Interesting, yeah that was a while ago, almost a decade, and he mentions that we have to act now.

I wonder what he would say if he was to revisit the article today.

Nomograph says

So what if the sheer size of China’s economy passes us one day?

We've been enjoying 25% of the world's resources since the postwar. With China as an economic peer, they will be taking more of what we've been getting.

Eg. California gets 20% of its imported oil from Ecuador. Very easy for that to fall to 0%.

The status quo is not sustainable and some very unpleasant evolutions are ahead of us.

I agree that China production capacity is going to surpass us, but at the same time they are finance to the TILT. And with a population that can’t afford anything that they make, who will buy this stuff when we decide that we’ve had enough. As a war power, if China is using old ship Hulls from 1988, then I really wouldn’t be too worried.

I did hear that Robert Gates is pushing to open up more factories in the name of National Security. He was shocked to find out his orders we’re mostly being fulfilled in China. Just as the interstate system was build in the name of National Security maybe our production capacity can be restored like this as well.

It makes me laugh that so many people talk about the US running out of money. Dollars is not the problem, there is plenty of money. They idea that we can’t afford to rebuild is a fallacy. The United States is the only country in the world that can finance anything it wants. We have a credit system. But the power that be, want us to believe that the money is gone. What’s choking America is not spending, it’s un-payable gambling debt left over from 100 years of financial bubbles.

Another laughable idea is that the US would declare BK or default. Yeah the US will declare BK before the Zombie banks. Just ridiculous. We are not Europe people. We fought a war called the American Revolution to break from Europe and create our own financial system. Now they are trying to mold us back to that old system. Unbelievable.

ur hero says

As a war power, if China is using old ship Hulls from 1988, then I really wouldn’t be too worried.

We're using older hulls than that dude. Check it out... the USS Enterprise was commissioned in 1961 (wikipedia):

http://en.wikipedia.org/wiki/List_of_aircraft_carriers_of_the_United_States_Navy

PLEASE, PLEASE, PLEASE... SOMEONE make a joke about the USS Gerald R. Ford??? I'm all blocked up for some reason.

Folks, it's not a question of some big bad wolf. The whole of the Asia-Pacific rim, from Korea/Japan to Singapore/India, which includes China in the middle, are investing in both R&D and manufacturing. And US executives and financiers, with both offshoring & capital expenditures, are making it easier for them to by-pass the USA within this decade.

From 1980 to 85, Silicon Valley used to make some ~80 of the world's chips. Today, that ~80% is made in Taiwan/South Korea. And likewise, all areas of R&D from chip design to material sciences are moving to east Asia.

This is what doesn't bode well for the USA, not whether or not we're number 1 or 2 by some normalized GDP statistics. If current economic trends continue, the USA will be little more than a country which exports its food stuff (corn, wheat) or fuel (shale oil, coal), and uses its banking/financial system for intl money vis-a-vis capital swaps laundering (see Switzerland post WWII or Cayman Islands starting in the 80s) vs the America of the 20th century which was the workshop of the world.

Semiconductor chips are like steal a century ago: a mature technology that had been highly profitable a quarter century prior to that, but being rapidly replaced by something else in terms of profit margin / real value-addedness.

Semiconductor fab facilities are extremely capital intensive, costing several billion dollars to build and are usually obsolete within half a decade and nearly utterly useless after one decade. IMHO, many of those Asian countries are doing it out of national pride / silly bureaucratic statistics. They are in effect looting their own citizens to subsidize chip users worldwide.

I'm still trying to decide if the biotech thing is real value creation or an offshoot of our lopsided medical/pharma/insurance/government-subsidy complex.

It may not necessarily be a choice (1) China #1 by far vs. (2) the USA #1 by far; however, things are changing so that the US will probably not dominate like it has the last 65 years.

"They are in effect looting their own citizens to subsidize chip users worldwide."

Our govt subsidies our financial services sector.

And how much do the stateside science/engineering quant traders, for hedge funds, add to the real US economy today? Granted it's helped in boosting the housing prices for the Hamptons Long Island and lower CT.

As for chips, the experience in semi-conductors (material sciences, applied chemistry, solid-state physics) then generate a pool of engineers for later LCD monitors and newer products. This is esp the case for South Korea. In the US, during the heyday of DuPont, GE, Xerox, DEC tech experience in one sector led to future development in others. Today, we don't have that critical mass of experience like before.

"I’m still trying to decide if the biotech thing is real value creation or an offshoot of our lopsided medical/pharma/insurance/government-subsidy complex."

The knowledge base in biotech will be felt worldwide, regardless of its sort of *rentier* stranglehold in the US. Realize, other nations, w/o an AMA-pharma complex, can develop macromolecule treatments, etc, which can facilitate their own medical success stories. This starts with the experience in biotech of stabilization large molecule targeted delivery. Or on the device side, sensors for precise tissue conditions.

All and all, technology is the generator of wealth for up and coming nations. Thus, any work in any sector has a spill over effect on others, esp if conditions for entrepreneurialism are there.