China v America who wins?
15
Oct
Interesting article in inactive investor today about China V America. I was asked if China’s success meant America’s decline. China will become the biggest economy in the World. But that doesn’t have to mean America goes into decline. It does mean
that America needs to keep producing well-run companies like Apple and Microsoft (MSFT), which offer products the world wants to buy, the US is still dominating the global business in many respects but its true that America can’t afford to relax. Other people disagree saying China’s rise means America’s fall. Here’s the follow article.
http://www.iii.co.uk/articles/54783/china-vs-america-can-superpowers-work-together
Put your comments below, I’d be interested in other peoples thoughts. Thanks
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China v America|
Agreed ! China success is America success . Being based in Shanghai One thing you notice is the shops / companies here are majority western , so with the increase of the middle class spending power , western / American companies would succeed . Looking back at history 80’s the popular media predicted of the dominance on Japan but this wasn’t ,
Economically China will succeed but in corporate instance America will be winners .
The Chinese economy needs to transition from one which is dependent on exports to one which is consumption driven. Only then can it truly be coinsidered a developed economy. The disparity between the upper and lower classes needs to narrow. There needs to be a strong middle class.
I listened to Jamie Dimon, CEO of JP Morgan Chase last week, he was holding a Q&A forum with a group of journalists and he described why he still thought the US was the best place to do business anywhere in the world and still the greatest economy, he summed the US 3 key strengths as follows:
1) Global superpower ecnonomically and militarily
2) Morality (not sure about this one given a handful of bankers brought the world to its knees)
3) Democracy
If you look at the above it is fair to say that until China has a democracy which a rising number of educated people in the middle class with demand in time, how they deal with their transition from an emerging economy to now developed economy will be China’s true test.
Reviewing the moral argument, corruption is still so rife in business and polictics in China that it cannot be the No 1 economic superpower until its trading partners have this trust.
And as for the renimbi as the Global reserve currency – unlikely for time to come.
In essence China needs the US and vice versa …
The fear surrounding the growth of China and the demise of America is totally unfounded,as China increases it wealth and development the western markets will reap the benefits. The opportunties for American companies to exploit these opportunities will depend on their ability to continue to develop products and services that the Chinese consumer aspires to posses and at a pricing level that is sustainable .
America has to admit the world is changing and embrace the concept in the same manner as some of the other western economies already have.
Talk of China facing a crash landing is premature…yes, their economy grew by 7.6 per cent year on year in the second quarter, which was its slowest pace in three years. However, is there another economy in the world that can boast its slowest pace of growth in 3 years is as high 7.6%?