China’s illusory decline | Republica

Discussion in 'China' started by Martian, Mar 29, 2016.

  1. Martian

    Martian Respected Member Senior Member

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    The author of the article below has an interesting insight. He says you can't point to Japan's historical economic slowdown after crossing the US$11,000 nominal per-capita GDP threshold as a guide for Chinese future economic growth.

    "When Japan crossed the US $11,000 threshold in 1972, its per capita GDP was 72 percent of the US level. When Taiwan crossed it in 1992, its per capita GDP was 48 percent of America's. The comparable figure for China today is only about 30 percent."

    The author says the important metric for Chinese future economic growth is the Chinese nominal per-capita GDP RELATIVE to US nominal per-capita GDP. Since US technology is improving every year, the technological frontier is constantly being pushed back. Thus, there is more room for China to catch up to the US. This means Chinese economic growth will be fairly strong (e.g. significantly above 3% and faster than US economic growth) for many years.
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    China’s illusory decline | Republica

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    Last edited: Mar 29, 2016
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