The blogosphere was all a-twitter today with news from the International Monetary Fund that the Age of America will end in five years. Yes, prepare for your inevitable servitude to Chinese businessmen as, in five years, they overcome us as the preeminent power
on Earth. We've only got five years left of being successful and safe. The coming Age of China will bring all sorts of new realities to the world, according to the commentators, including the United States going the way of the Soviet Union, the British Empire, and the Dodo. How very silly.
First of all, people who lament the rise of other economies around the globe in relation to our own begin with the flawed perception that there is a finite source of wealth in the world and that as others get richer, we get poorer. This is absolutely not true; just because the once-called "Third World" is rapidly gaining on us in economic progress does not mean that we must begin to decline as a result. Yes, it changes the way that markets and economies operate and require some readjustment, but the idea that just because China is rising economically that we are going to be worse-off is ridiculous. It does put us at a disadvantage insofar as we are no longer able to project our power as easily as we used to in certain parts of the world-- but that change is a result of them getting stronger, not us getting weaker.
Second, projections of China's rising power are grossly exaggerated
. Overlooking the massive fact that hundreds of millions
of Chinese still live in feudal poverty, their economy is built on severely unstable foundations. Eager to increase their power, wealth, and prestige, the Communists have cut all sorts of corners to inflate their economy and over-invested in property and infrastructure. Take, for example, this episode concerning China's poor investment in high-speed rail
(something to note from those in the United States who lament our lack of high-speed rail in relation to our Eastern friends): highlighting the corruption and shortsightedness of the Communist Party, the Chinese have invested $300 billion in an intricate high-speed rail line. The New York Times and President Obama gushed over the Chinese investments
in airports, electric cars, and bullet trains, citing them as an example for America to follow. The problem? No one is riding the trains and the airports are empty. The government is $270 billion in debt over the bullet train investment, and they have had to lower the speed of the trains by 30 MPH due to safety concerns that came up because of how haphazardly this was done. It is a train wreck that they will never be able to pay for (note to those supportive of Obama's investment in high-speed rail: Japan and Thailand saw their trains bankrupted too after investing in it).
Like their investment in trains, China's economy will soon wreck as well. Their excessive investment in unused infrastructure, the bureaucratic corruption of their government and businesses, and the abject poverty that 95% of their population lives in will lead to a collapse. It's a paper tiger dangling over a flame. At any rate, hopefully their growing middle class and increased access to sources of non-censored information will lead to political reform in the country. In the mean time, American politicians should stop looking at the Chinese as a model for anything (especially infrastructure investments) and pundits should stop decrying the decline of the United States before an ascendant China. They have a long, long way to go.