I wonder if you’re familiar with “Winner Take All” by Dambisa Moyo? She feels (over-simplifying a bit) that China’s rapid acquisition of commodities and resources, world wide, was to be expected once their large population learned of Western living standards and upward mobility. She contends that China is making more effort to be good citizens during this process than most nations have historically – ie. trying to pay market prices, partner with producers where possible, etc.

Ms. Moyo seems to be considered a competent macro-economist (for what that’s worth in a world of governments determined to overcome normal economic forces). Personally I found her book a bit repetitive, and perhaps overly optimistic in spots, but quite readable. Your comments on her perceptions would be interesting.

Thanks.

May I recommend you the book “China Shakes the World:The Rise of a Hungry Nation” by James Kynge? I read it (and although it’s a litte outdated, 1st edition 2006) and found out that some of his predictions did happen.

Greetings from Holland, Aat

Question: What about exports of products containing metals? I’m doubtful that China uses 70% of all metals world wide. China may use it and put it into products, but the products are used by the rest of the world.

“Saving” is often caused by a reaction to a crash, so a financial crisis such as a great depression implores people to stay out of debt including by saving instead of going into debt. There is a lull before populations are confident enough about their economies to get back into debt, so that dynamic will be interesting to watch, as the West is very slowly coming out of a crunch and China is just entering one. I loved the, “… ever more poorly educated politicians …”

By far the most important thing to monitor in my opinion is the internalization of allocation of resources; whether China keeps everything it digs up for itself or not. If not, the impetus for the rest to recycle is less. Even Keynes noted that a market economy is finite and outgrows itself, which had not happened in his life time.

You wrote “we will surely see by 2020 at the latest, the return of China to its former place as the nation with the highest GDP”. Using 2012 nominal GDP figures of USD15.68 trillion for U.S. and USD8.23 trillion for China, in order for China to overtake the U.S. by 2020 would require 8.1% higher compounded average growth rate for China vs. U.S. (technically the ratio of GDP growth per year between China and U.S. needs to have a geometric average of at least 1.081). If the U.S. manages a 2% growth rate, then China would need 10.2%. Even if the U.S. had zero nominal growth rate, China would still need 8.1%, which exceeds its current growth rate. Therefore I find your proposition, while not impossible, rather dubious.