Is China the Next Superpower
Is China the Next Superpower?
The Chinese have long seen themselves as superior to every other race and the center of the world. It’s because they were so confident of this, that historically they never ventured out much or as often as the Europeans did.
Well, that is with a brief exception during the 15th, Century (from 1405 to 1433) when they had a fleet of gigantic ships, vastly superior to those of Europe and they ventured as far as Africa and India and some say they even went as far as America, before Columbus. The Chinese had long been a nation of seafarers and had invented the mariner’s compass in the 11th century.
Then They Shut The Door
But then the Emperor reversed the policy of open exploration and by 1500, it became a capital offence to build a seagoing junk with more than two masts. It is said they burned the large sea going ships, which abruptly ended further exploration and potential global conquest or at least exporting their culture. They shut the door to foreigners and isolated themselves from the world for the next three hundred years.
It was the Europeans that came to China looking for opportunities and as a latter consequence it was the Chinese who were on the receiving end of whatever Europe dished out.
The Chinese were happy to sell too, (but not buy from the European traders). They demanded payment in silver for their tea, silk and ceramics and eventually this imbalance of trade caused resentment from the Europeans (especially the British) who wanted reciprocal trading.
A market was initially found for narcotics (Opium) that resulted in the infamous Opium Wars, of the late 1800s’ that resulted in the humiliation of having foreign soldiers running around the Chinese countryside. But it was also the beginning of international markets being established for many port side cities in China.
The Chinese have historically valued the importance of ‘saving face‘ (it’s culturally important to them) And just as they have a deep-seated resentment of the (“foreign devil“) for the humiliation suffered by occupying places like Hong Kong, Macau, Shanghai, and numerous other enclaves.
The Chinese today, also resent the U.S government interference in its global expansion plans and it dislikes immensely the U.S parading its aircraft carriers, in and around the South China Sea. A body of water that they claim belongs to them.
The U.S government may feel like it can call the shots, because it has a dozen aircraft carriers and a couple of thousand fighter planes. But times have changed since the early nineteenth-century, and the U.S government might actually be antagonising what could turn out to be a sleeping dragon.
It could be making a serious enemy with a country that now has serious wealth and a lot more modern technology. Unlike the China of early times which was isolated and insular, modern day China is vibrant and relatively advanced, and at the end of the day, any war will go to the country with the most wealth. Not the one that has the most expensive military hardware. A modern day war with a country like China would certainly bankrupt America.
Putting thoughts of war aside, there are dozens of likely scenarios as to what might happen in China over the next few decades and although I am not going to pretend I can predict which one is the most likely to occur.
However, the trend that seems the most credible is the rapid rate of wealth increase in China.
I would never credit any official government figures with any accuracy, (because all Government lie – some more than others) but if we were to assume them to be correct, then the U.S. economy is growing at 2%, and China’s at about 7%.
Now add to that China has about four times the population, then this means that the largest economy on the planet may soon no longer be the U.S.A, but China. (For more on this you may wish to view my other post here)
While the country has remained steadfastly a one party communistic state they have whole heartily embraced capitalism (at least economically) since the Nixon era of the 1970s’ when they opened the door to doing business with the ‘west’.
There has been, and continues to be reforms to its economic model and unlike America they are quietly unapologetic about making money. The Government of course still owns and controls many of the major businesses, it restricts wholly owned foreign competition and it still owns all the land in the country. The people pay ‘for everything’ and nothing is free!
Even the Panda is loaned out to other nations on a ten-year contract that includes a fee of $1,000,000 per year and a provision that any cubs born during the loan period are the property of Chinese Government. This has been the arrangement ever since 1984.
So, it’s really no surprise that their GDP has shot up nearly 10,000%, since 1972 from $113 Billion, to $11.2 Trillion, today. One thing is for certain they know how to make money.
China vs. the U.S.A
The US has been the worlds largest economy in terms of GDP since the 1920’s overtaking Britain and is currently 22.4% of Global GDP. But China is quickly closing the gap. The USA exports to China account for 7.7% of total exports and its imports account for 21.5% with Canada and Mexico both tying at second with 13.2%.
Other statistics are below;
- Cash Reserves: China has US$3.2Trillion vs. America US$434Billion
- Total GDP: China US$11.26Trillion vs. America US$18.42Trillion
- GDP per Person: China US$14,600 vs. America US$49,888
- Average Income: China US$7,593 vs. America US$54,629
Of course, the average American will still be living far more comfortably than the average Chinese in that he’ll still have a bigger house, more gadgets, cars, and consumer goods.
But if look at China vs the U.S.A, he will have considerably less investment capital and savings, and there will be far more Chinese, with substantially more wealth than many wealthy Americans.
The Chinese people save over half their income and invest in real estate, even though they don’t own the actual land (since 1949 it’s been leased for 70 years from the government)
Nevertheless home ‘ownership‘ is high (at 90%) compared to the U.S where it is just 64%.
Also, most Chinese households have a major proportion of their assets in real estate vs. 27.9% in the U.S.
As the incomes in China have increased so has real estate values have gone up. In Shanghai, for example, it has increased 560% since 2000.
Also, the Chinese are buying up expensive real estate all around the world and as a result, have become the leading buyers in cities like Sydney, Singapore, L.A., San Francisco, New York, Vancouver, and London.
In 2014, they accounted for around $22 billion or some 24% of the total real estate purchases in the U.S.
Why China Has More Growth
It has nothing to do with the Chinese Government, which has actually hindered the Chinese economy. (Apart from Deng’s liberalization of the economy, in the 1980s’) Doing business and trading with the West and opening up its markets is the prime reason for the last three decades of incredible growth. There are also other reasons for its economic expansion.
One is that Chinese culture is ingrained with the Confucian work ethic, which is exploited by the Chinese government in its efforts to grow the economy, but nevertheless, this work ethic is similar to the ‘Protestant work ethic’ that helped the West get where it is now.
Another, is the sheer number of people that share a common culture and language. Upwardly mobile Chinese are now learning English, the world’s Business, Science, and technology language. So they can access everything from the West.
Also, just as other people, from a given culture tend to prefer associating and doing business with themselves, for example, the Jews, blacks, Arabs, Irish, Italians, etc., the same is true of the Chinese.
And they a much larger than any other cultural grouping so from a financial point of view this means that business opportunities are largest within this group.
They are Smarter
Also, the Chinese on average are smarter than Westerners and have a higher I.Q (105 vs.100) As an example Chinese children need to learn 3000-5000 different characters to write and read Chinese and spend much more time is school.
Whereas western children only need to know 26 letters of the alphabet to read and write and some even struggle to do that. So perhaps that explains why the Chinese tend to do better academically and prosper in business all over the world, once they get out from under the Chinese Governments control over them.
Take an American and a Chinese, each with a dollar. Say both are equally smart and hardworking, and each can double his dollar every year, 2, 4, 8, 16…
The only difference is that the American pays 35% – 50% in taxes and the Chinese pays far less by comparison because the state provides almost nothing.
In China, you pay for almost everything, education, medical care, to use the roads, to visit a park. There is no sense of entitlement, they are brought up to pay their own way through life, nothing is free, and credit is not easy to get.
Whereas the average American has been so brainwashed that he thinks he has a moral obligation pay taxes to the government at whatever rate it asks for; he thinks it’s dishonest or it’s cheating if someone doesn’t pay or if someone puts their own family’s welfare above the demands of the State.
He also thinks the State has a moral obligation to provide for his health, education, welfare, and retirement. He actually believes that these things are ‘entitlements’ that are his by right.
The difference is that the West has become morally weakened by its own prosperity, corrupted by its own government’s lust for power. With the creation of a class of citizens dependent on welfare in exchange for votes for those who wish to remain in power. And that premise is well supported by current events and economic, records.
What is Clear
What is also pretty clear that society, a government, a corporation, or an organization of any type is pretty much like a human body in at least one way: As it gets older, it gets weaker and more corrupt as it approaches its inevitable death.
In China, you have the first generation of new money, who have an expectation that things are getting better as they have steadily improved economically over the last thirty years and since the culture revolution of the 60’s each generation has been better off, than the one before. The opposite is the case in America.
The reason the Chinese Government maintains a tight grip on the internet, the foreign media, education and enforces strong censorship laws, is because, they, like many governments in the world, fear losing control.
Hence their immense concern about its people gaining access to information that it does not approve of.
Because, the average educated, Chinese, once they recognize the government is his adversary will feel no moral obligation towards it, only to his family. When he realizes that “the government” is just a warlord, and as a ‘government warlord’ is just another major league criminal, he will treat it accordingly.
He will consider it his duty to deny resources to the State because he knows he can’t feed the beast and his family with the same grain of rice.
One Billion Plus
They are already hard-working and self-reliant, and there is no concept or belief in the State taking care of him; that’s something his family does. When one billion plus people awaken to that realization, there is nothing its government can do to stop them. – Sadly in America, the people still believe their government is somehow still working for their best interests and will go down with the ship.
Where will it all end up? In the short run, with America in rapid decline, China will soon become the world’s biggest and most important economy. And it could happen faster than most people think.
China wants to unseat the U.S. as the dominant world power and to do this, China is spending billions of dollars to develop the “New Silk Road.” The New Silk Road is the world’s biggest infrastructure project. If all goes according to plan, it will give China a huge economic advantage over the United States.
If China succeeds, it would overtake the U.S and become the dominant global superpower. This could trigger the biggest shift in global power since the end of World War II.
Hiding the Truth
It’s one of the biggest investing stories in the world. Yet the U.S. media barely mentions it. Maybe because it’s too big and complex of an idea to fit into soundbites. Or perhaps the Government doesn’t want the American public to awaken to its incompetence and mishandling of global affairs and the destruction of the American Dream.
If the Chinese people awaken to their political one party con game, they may also react swiftly in eliminating all vestiges of government intervention in their lives.
Should that happen, it will propel them into superpower status at such a speed that has never before been seen in the world.
America Should Be First
This is something that America, should be doing first, because it became rich and powerful because it had a limited government.
But sadly most Americans never recognise they have been brainwashed into thinking they are still living in the land of the free & the home of the brave.
Instead, they prefer to believe that countries like China and Russia are their enemies and their own Government is their friend and protector.
Yet in truth, not only does their own government spy on them, deceive and mislead them, they also hide the truth from the very people they pretend to serve.
I talk more about this in another post about the people who are the real benefactors in our society.
More On China vs The USA…
The typical Chinese day labourer today makes six times as much as he did in 1999. So the average person has more money than ever before. Whereas the typical American day labourer has gained little, in fact, after you have taken into account inflation, the American worker has not had a significant raise in the last 40 years.
Add to that the cost of medical care which is more than seven times more than it was in 1980 and total household debt has risen nearly 12 times since 1980. America is living on its past economic wealth (which is fast evaporating) and China is quickly developing economic smarts.
What’s China’s Position on North Korea.
Why does China not put more pressure on North Korea to cooperate with the Western powers to limit the development of the DPRK’s nuclear program? The answer is simple, and here’s what most people don’t understand about China. It’s still a communist country and it wants to keep North Korea as a buffer zone between South Korea and China. They don’t want their people having direct access to that boarder.
But they also don’t want North Korea to collapse either (nor a reunification) as that would also put South Korea directly on its border, with all their ‘US’ forces and bases they have. Nor do they want poor and desperate, North Koreans fleeing into China, if it collapses economically. So they continue to secretly fund the regime and will do all they can to prevent any ‘invasion / occupation’ of North Korea.
Communism and Military Might
Communism, in the Soviet Union failed (for many reasons) but one was because consumers were forced to buy whatever shoddy products that were available to them and the producers had no reason to want, or to learn, how to make better ones.
Toward the end, products available for purchase in the Soviet Union were worth less than the raw materials and labor that went into them and hence they exported very little. Plus of course they spent over 60% of their GDP on the Military and so consequently they went broke.
Today it’s a different story…
- The USA spends 3.3% of its GDP on Military spending – US$ 597.5 Billion
- Russia spends 5.3% of its GDP on Military spending – US$ 65.6 Billion
- China spends 1.9% of its GDP on Military spending – US$ 145.8 Billion
Note: Chinese military spending has doubled between 1997 and 2003 and it continues to grow at over 10% annually but as the country’s GDP grows larger each year, the percentages look smaller. See graphs below and right.
By Kadsura at English Wikipedia, CC BY-SA 3.0, Link
The Chinese, however have learned many lesson from the collapse of the Soviet Union and as they now make many of products for the ‘west‘ they have learned how to export low cost products and generate a large surplus income from the rest of the world. They have also grown their military faster than any other country.
America Was Great – Once!
America was once great, an unprecedented economic powerhouse, the land of innovations and freedom. Before the government destroyed the entrepreneurial spirit with too much regulation and intervention into the economic affairs of its people.
As China grows its economy, by reducing its red tape and regulation of businesses.
America adds more rules and regulations to her businesses, impeding innovation, and entrepreneurship. Yet the American people don’t see it. They think a new President will save them.
Don’t Rely On The Government
The Government is not going to save the economy. It will be the innovators, the entrepreneurs, that will bring about the economic salvation that the world desperately needs.
It is going to be people like you and me pursuing their passions, their interests, their freedom and affections for decentralization and independence. These are the people who are the real benefactors to society.
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Should the Chinese people ever become free from the control of their heavily information censoring Government. It would give them ‘real’ access to the internet (– Not, the heavily censored ‘intranet‘ they currently have). This will lead to an explosion of internet searches as they seek to explore a ‘new world‘ of knowledge. Knowledge and information that is currently denied to them.
Will China Be The Next Super Power?
It’s hard to know for sure but they are trying hard and you don’t want to be left behind and uninformed, so you need to seriously consider how you can cash in on this potentially new future world order. On thing is for certain, if it’s going to happen – it’s going to happen quickly.
- For more posts on China use this link here
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This was an extremely interesting article! I’ve long had a sinking suspicion that China would eventually surpass the USA in almost every way. I agree that China may even end up owning the USA at some point
Do you think there are additional reasons as to why the Chinese may be smarter on average other than their alphabet?
Hello, burleyboy. Thank you for your comments. I don’t know why they are smarter I haven’t researched it to uncover the reason, I just thought it was an interesting fact, and put it in my post. Pleased that you enjoyed the article and hope you also like the eBook that is coming your way. 🙂
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Hello, Huguens Thanks for your comments. I didn’t expect to get a review of my entire site but I am happy you seemed to have liked it. Thanks 🙂
Interesting post, Peter.
I do find it amazing how quickly China’s economy has grown in the past 40 years.
I do think one thing that may hurt China’s economy in the coming years is its changing demographics. China’s one child policy will reduce the population significantly once older Chinese citizens start to die and there are not sufficient numbers of the younger generations to replace them. Combine that with the fact that they have been selectively having boys, and I’m thinking they may be headed for a demographic nightmare. To me, the government should’ve seen this coming.
Hello, Andy. You are right about China’s demographics problem and that problem is only one of many that are smothering away behind the scenes here in China. There are many things (such as this) that most Governments around the world “should have seen coming” but then again they are not thinking long term nor about the people they ‘supposedly’ serve. BUT instead they are thinking only about themselves and the here and now! One day we will all wake up to the fact that ‘THEY’ do not serve us and that we don’t ‘NEED’ them. Much like a flea on a dog. The dog doesn’t need the flea, but the flea cannot survive without the dog!
Thanks for your comments. 🙂