(From Wall Street)
How long do we have until China becomes the world’s dominant power? The China bears will tell you that the case is way overstated, and that the real danger is a Chinese economic collapse that will result in a violently aggressive foreign policy. But a recent study by the economist Angus Maddison projects that China will rise to dominance as early as 2015.
As measured by purchasing power parity, China is already catching up.
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.
Well, I for one will say “Ni hao ma” to our Mandarin overlords.