Will 'Chindia' rule the world in 2050, or America after all?

pmaitra

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Will 'Chindia' rule the world in 2050, or America after all?

By Ambrose Evans-Pritchard, International Business Editor
10:05AM GMT 28 Feb 2011
Telegraph UK

With a small tweak in assumptions and the inexorable force of compound arithmetic, Citigroup and HSBC have come up with radically different pictures of what the world will look like in 2050.
The Muslim powerhouse of Indonesia will alone match the combined GDP of Germany, France, Italy, and Britain by mid-century.
[HR][/HR]
The economies of China and India will together be four times as large as the United States, restoring the historic order of Asian dominance before Europe's navies burst on the scene in the 16th Century.
[HR][/HR]
Catch-up countries merely need to keep reforms on track, open markets, "don't be unlucky, and don't blow it", and let convergence theory do the work for them.
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Having rid themselves of calamitous nonsense – Maoism, the Hindu model, and other variants of central planning or autarky – and having at last achieved a "threshold level" of law and governance, nothing should stop them, or so goes the argument.
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Chimerica, not Chindia, form the G2, towering over all others in global condominium. Americans prosper with a fertility rate of 2.1, high enough to shield them from the sort of demographic collapse closing in on Asia and Europe. Beijing and Shanghai are 1.0, Korea is 1.1, Singapore 1.2, Germany 1.3, Poland 1.3, Italy 1.4 and Russia 1.4.
[HR][/HR]
Americans remain three times richer than the Chinese in 2050. The US economy still outstrips India by two-and-a-half times.
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Mr Magnus is scathing about the "muddled thinking" of those who fall for BRICs hysteria, or who succumb to the facile conclusion that the global credit crisis finished the West and served as catalyst for a permanent hand-over to Asia.
Source: Will 'Chindia' rule the world in 2050, or America after all? - Telegraph
 

civfanatic

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I think it's pointless to make predictions so far down the line. We cannot even predict what will happen in the next 10 years, let alone in the next 40.

I wonder how many people in 1865 predicted that Japan would defeat the Russian Empire within 40 years, or how many people in 1920 predicted that Britain and other European countries would lose most of their colonial possessions within 40 years, or how many people in 1950 predicted that the Soviet Union would collapse within 40 years. History has a habit of throwing surprises.
 

pmaitra

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I think it's pointless to make predictions so far down the line.
Exactly. This commentator agrees with you, and provides an interesting perspective:

Interesting comment:

graeme_b
02/27/2011 09:06 PM

2050?

'Ray Kurzweil has used Moore's law (which describes the relentless exponential improvement in digital technology) to calculate that desktop computers will have the same processing power as human brains by the year 2029. He also predicts that by 2045 artificial intelligence will reach a point where it is able to improve itself at a rate that far exceeds anything conceivable in the past, a scenario that science fiction writer Vernor Vinge named the "singularity".'

(from the wikipedia article on artificial intelligence)

2050 is hidden from us by the dense, impenetrable fog of time.
 

pmaitra

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Another informative comment:

upennwharton
03/02/2011 07:08 PM

People like you are really quite ignorant of history, and conveniently discard them when they don't suit your present interests.

"Somehow observers have overlooked that China's model isn't one that could remotely be compared to capitalism. China's economic system is based on a mercantile Manchurian model that the Japanese refined in the 50's and 60's. Trade barriers, export subsidies, captive consumers corraled, the demand for technology transfer, and currency controls."

Try to replace the word China in your statement with every other major industrial nation's name in the world and it would still make sense. The fact is that America, England, Germany, and Japan have all utilized "unfair" and "unfree" trade and industrial policies in the past.

In the late 19th century, America, while at the height of its isolationist policy, had THE most number of protectionist policies in place that discriminate against British and European firms while protecting the Rober Baron monopolists like Rockefeller, James Duke's American Tobacco Company, and AT&T's 80+ years of monopoly on the telecom market. And guess what, how did we Americans build the modern corporate empire we have today? In the very beginning, we stole European technologies and told our Congress to keep out foreign competition through insanely high tariffs all the way through the end of the Great Depression.

Don't be so naive about the so-called "free capitalist society." I would not have called the U.S. economy "free" back then when one single man called Rockefeller controlled nearly 90% of the domestic U.S. petroleum market until 1911. And good luck trying to "freely" compete with the likes of AT&T...the U.S. government literally granted them a "legal monopoly" until 1982.

Oh of course, you might say that we have "improved" and "moved on" since then. Yes, we have. So now, we (the west) are in a comfortable position to tell other countries: "Don't be like us when we were growing and monopolizing the world economy 100 years ago...now all countries must follow newly created rules of 'fairness' and 'free competition' and 'open markets.'"

The official explanation behind those caring concerns we tell to our current emerging market friends is that we want everyone to treat each other "fairly" and grow "sustainably" (how ironic).

The real reason behind those suggestions is that the current set of new rules of fairness and free competition and open markets conform to our current interests.

Try to read up on western country's business and corporate history before making another "observation" that may mislead other uninformed readers.

Reading the works of world class business historians like William Roy and Neil Fligstein (Princeton and Harvard B-School) is a good place to start.
 

pmaitra

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Counterpoint (context starts from paragraph 3):

Otsuka Duojinshi
03/02/2011 11:20 PM
Your FIRST post, upennwharton? You have honored me with the loss of your virginity? I'll try to make this less painful – the loss of one's virginity usually deserves some accommodation. Not in this instance, however. You'll find it a bit more painful than you might have anticipated the 'first time' would be.

Oh, where o' where to begin? Content? No, let's begin with form. If you desire to have a reasonable discourse with someone or within a comment section 'forum' it's not a good idea to shoot your mouth off or shoot yourself in the foot by beginning a comment with – "People like you are really quite ignorant . . ." You are not in the undergraduate dorms any longer – this is the big leagues; investment bankers, active traders, retired traders, and business people gleaning shreds of sentiments both from the article AND the ensuing debate in the comments section. Instead of saying "Don't be so naive about . . ." demonstrate what illustrates my naïveté. And antithesis utilized in the form of "Oh of course, you might say that . . ." is a really bad idea, particularly when you have absolutely no idea what I might say and that instead of this forum being a graded paper – it has the prospect of immediacy. Right now.

Well then, on to content.

I tried to replace China with other countries' names and found very few of them followed the Manchurian mercantilist models that Japan and China have used this century to build their economies. The rest of your examples and arguments are a tired re-hash and mish-mash of the 60's Marxist, multicultural professoriate that inhabits academe today. World economic history is replete with "'unfair' and 'unfree' trade and industrial policies in the past"; but that doesn't make China's current economic development neither morally equivalent nor even remotely comparable to 19th century America.

Had your undergraduate professors let you actually study 19th century economic history instead invoking the straw man of the "robber barons" you would have learned that the transcontinental railroad was, indeed, a corrupt land grab and subsidized bankruptcy in the making engineered by Crédit Mobilier involving bribing congressmen and stock speculations. So, therefore, a James J. Hill counterpart in China is just waiting in the wings ready to build the equivalent of The Great Northern Railway without any government subsidy at all. Oh wait, that Manchurian mercantilist model doesn't allow any private entrepreneurial activity at all because all transportation is owned by the central Chinese (Manchurian) authority.

"In the late 19th century, America, while at the height of its isolationist policy" Huh!?? Uhhh, just off the top my head, post Civil War – 1866 Commodore Perry, the Meiji restoration and the opening of Japan to trade; 1870's interference with and the dissolution of the British East India Company; and no review of American 19th century 'isolationism' would be complete without closing the century with the Panama canal, the Pilipino Morrow uprising in one ocean and the Spanish-American war in the other. You might describe late 19th century American policy as many things and in many ways but isolationist isn't one of them.

The rationalization of the oil industry by Rockefeller is a study in serving customers the lowest price – it was politically connected losers that inculcated the notion of 'predatory pricing' that led to the perversion called the Sherman Act. Your professors obviously didn't let you read the crime illustrated in the ALCOA decision, nor are you familiar with its current day inapplicability illustrated by US v. International Business Machines or US v. Microsoft. But that 19th century relic has perverted speech into this ridiculous notion of 'classes' of speech. Again, recently overturned. Stolen European technologies? Thoroughly discredited 80's multicultural claptrap.

Read recent scholarship about 19th century tariffs and current Nobel Prize winning researchers would inform you that far from being insanely high – they were tailored intelligently to maximize revenues – and this was the way governments were financed before income taxes were invented.

"We want everyone to treat each other "fairly" and grow "sustainably?" Anthropomorphic Global Warming. So last year. So over. Get with it mate!

William Roy and Neil Fligstein aren't "world class business historians." They are sociologists (whatever that anecdotal joke of a field is) that worship at the altar of Max Weber in the same fashion that Marx & Engels did. The Calvinistic notions that led to the labor theory of value, thence the subjective theory of value, has been pretty thoroughly critiqued and mooted by Schumpeter, Kauder, von Mises, Hayek and Strauss, amongst many others. Might wanna put a little "diversity" into your own intellectual inquiry there, upennwharton.

Finally, I'd like to add that this free exchange and discourse is something I cherish and look forward to. Don't take anything written here as a personal attack. It's a shame that Chinese citizens live under an authoritarian regime that doesn't allow them to have this type of discussion you and I are enjoying. Manchurian.

I hope your first time was as good for you as it was for me!
 

pmaitra

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Encouraging comment:

graeme_b
02/27/2011 11:28 PM

"Will 'Chindia' rule the world in 2050, or America after all?"

By 2020 it is more likely we will see America/India versus China/Pakistan. Japan will continue its soft foreign policy, perhaps drifting into China's sphere of influence due to extensive trade ties; and Russia, uncomfortable with China's rise, will probably remain neutral, busying itself with picking over the EU carcass after China has made off with some scraps of bacon. 2030 onwards should see America/India gain the upper hand.

Welcome to the Amerindian century!
[HR][/HR]
Franken_Stein
02/27/2011 11:49 PM

How can that be with John Boehner publicly admitting:

We're broke.

You are either broke, which means you can't spend anymore, or you are not.
You can't have it both ways.

In case you don't know, but the Fed now owns 37 % more in T-Bills than China.

That's why it's so important to read Zerohedge,
because only there you'll get the latest facts.
[HR][/HR]
graeme_b
02/28/2011 12:14 AM

Mr. Boner is just trying to drum up support for cuts.

BTW, I agree they will be broke before long unless they make serious cuts; but I still think they'll inflate and cut rather than actually default.

You never know, the Fed might make a nice little profit on those T-Notes if there's a double dip in the near future. They could recycle the money into stocks and property for the greater 'wealth effect' (not becuase they expect inflation you understand) - imagine that? The horror!
 

civfanatic

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Looking through the comments on the article, it seems that most people don't think India will become a world power even by 2050, and that people seem highly concerned (indeed, terrified) of China as well as "Islam", even though "Islam" is not exactly a coherent entity.
 

Armand2REP

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The Muslim powerhouse of Indonesia will alone match the combined GDP of Germany, France, Italy, and Britain by mid-century.
:laugh::rofl::laugh::rofl::laugh:
 

pmaitra

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Looking through the comments on the article, it seems that most people don't think India will become a world power even by 2050, and that people seem highly concerned (indeed, terrified) of China as well as "Islam", even though "Islam" is not exactly a coherent entity.
Thank you for reading the comments. They are indeed very enlightening. Not all commentators are hicks there. I am to understand that many commentators are actually people who understand economics, and are either stock brokers, accountants, and other related job-holders.

Mighty interesting.
 

pmaitra

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Unruffled:

finsternis
02/28/2011 04:48 AM

My prediction is that in 2050 people will still be making wildly fantastic prophecies about one thing or another. India will work its way up, but it will be chaotic and somewhat slower. China will work its way up, but it will have its own problems to deal with. I'd be happy if Taiwan was left out of it, actually. The USA will get some things right, some things wrong, and probably still be around doing something or another. The predictions about the demise of the UK and the countries of the European continent will not pan out. While less influential than they once were, they will still be around doing something or another. In general, life will go on much like it always does.
 

pmaitra

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Another 'prophecy,' albeit, a reasonable one:

cr
02/28/2011 05:42 AM

I'm inclined to support Ambrose's anthropological leanings: '...the enduring hold of cultural habits, beliefs, and kinship structures, and because of an unwillingness to accept that top-down regimes make good decisions in the end...'.

For example, the notion of raw democracy runs deep in the Northern tribes, from Vikings onwards.
More recently, the declining birth rate coincided with the rise of the pill, feminism, and materialism in the relatively prosperous 'baby boom' generation post WWII, and 'having it all' = family and career, with dual incomes and cheap credit maximising the effects of this 'social revolution', voiced in the music of the times.

Conversely,the loss of money gives men and women more incentive to value each other,rather than material things.Just look at birth rates rise whenever there is an electricity power cut; old habits die hard ;-).

Surveys show that most working women with children are unhappy; they feel like wage slaves, and consumerism plus modern indoctrination traps them. When Americans and Brits must lower their spending in order to pay for more expensive necessities like food and energy, then they will return to their cultural norm: most women have babies and stay home to raise them, men go to work, the economy will downsize accordingly, and Western cultural habits will reset to the traditional. The birth rate will rise, and the State will get smaller as people choose self-reliance over bureaucratic meddling. Necessity becomes a virtue, and it fits well with Anglo-Saxons, and others who live among them will be expected to acquiesce.

Omens are bad for the Far East and the Middle East; nations who dictate their birth rate either by State policy, eg China, or Islam's usual overpopulation exceeding the capacity of it's resources.

Key point: northern tribes in the West adjust to new realities, as per usual. Far Eastern and Islamic countries comply with their tyrants, and riot or starve when the consequences are too late to reverse.

America will prevail. HSBC is correct, in my opinion.
 

sukhish

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India will surpass china in 2050.
india will surpass china much before. china's economic model of stealing from public savings and investing them into non productive steal bridges and buildings is going to come to a halt. no wonder people in china are still poor, because wealth belongs to the CPC which gives pethatic low interest to its citizen and rob them of there due share. there is no such thing as chindia , it's only india and that's just it.
 

Singh

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Looking through the comments on the article, it seems that most people don't think India will become a world power even by 2050, and that people seem highly concerned (indeed, terrified) of China as well as "Islam", even though "Islam" is not exactly a coherent entity.
A large section of muslims have adopted Islam as their de facto socio-economic politico-religious identity, this is causing severe conflict between them and others.
 

civfanatic

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A large section of muslims have adopted Islam as their de facto socio-economic politico-religious identity, this is causing severe conflict between them and others.
This is true. But it remains to be seen if this resurgent Islamic identity can overcome regionalism and nationalism as well as internal sectarian divisions. The Islamic world is currently far from being monolithic.
 

Singh

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This is true. But it remains to be seen if this resurgent Islamic identity can overcome regionalism and nationalism as well as internal sectarian divisions.
In addition there are other issues at hand :

1. Rise of mullahs in Islam : Estalibshment in the Islamic countries has used mullahs to legitimize and cement their rule. The democratic countries unfortunately too show patronage to the mullahs/religious elite instead of the muslim intellectualism. Even in India, political parties heed to the wishes of the muslim clerics and not to those of the muslim elite, intellectuals, middle class etc.
This strengthens the clerics, and literally pushes them into the leadership role of the community.

2. Pressure on secularism : Adoption of an Islamic identity as stated earlier is causing fissures in the secular tolerant fabric of the society. And those adopting far-right ideology to counter Islamism are actually scoring a self-goal and are a part of the feedback cycle.

Possible Solutions :
1. Limit religious freedom to personal domain and cultural autonomy and preservation. Don't allow religious conventions to invade one's political, economic life.
2. Encourage intelligentsia to assume leadership, and force mullahs out. Help forge a secular political identity whilst retaining religious beliefs (if such a thing can exist?)
 

ice berg

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india will surpass china much before. china's economic model of stealing from public savings and investing them into non productive steal bridges and buildings is going to come to a halt. no wonder people in china are still poor, because wealth belongs to the CPC which gives pethatic low interest to its citizen and rob them of there due share. there is no such thing as chindia , it's only india and that's just it.
You are having a rather lousy trackrecord so far. WHen the commies took over , India had a bigger GDP than China. Now China is four times bigger. Not to mention higher growth and lower inflation in China compared to India.

Everything is possible in 40 years. However you have alot to prove before that.

The "non productive" infrastructure among others. :rofl:
 

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