It will soon be much more than 30% of GDP. The US seems to have forgotten that the economy is not a zero-sum game.
I mean the US government could do things like provide lots of incentives for its citizens to reproduce but, nah, too difficult. Just import the entire third world, things will work out fine.
Doubtful it'll happen, but still a possibility.
The minute oil producers start accepting other currencies (which is what trade blocs such as this could accomplish) or they reduce their dependence on oil (which is what Chinese companies are offering for cheap), these countries will not even try to export to North America because population-wise, America can never have as many consumers as Asia and Africa.
Our wealth in America is only because we are the reserve currency. We are not producing goods and services of the future any longer.
Not sure what you are talking about here.
Majority of globally successful companies still come from the US and that isn't changing anytime soon.
You should look at China's stock market and what they are able to achieve without printing trillions like the US just did. And we are still not out of covid.
The entire Chinese banking system is essentially bankrupt.
Chinese companies are forced to accept suboptimal business decisions to further CCP goals.
In spite of the incredible inventiveness of the Chinese people, companies in China outside of PCB-level board assembly are weak and uncompetitive, having been the beneficiaries of government protectionism (how many countries use Baidu for example).
Except for a video-sharing website for teenage girls.
And a network switch manufacturer that is subsidized and owned by the government.
And the population is getting old before it gets rich, with no social safety net.
What does fiat currency even mean in a closed society? Is China solvent or not? What can we say about government debt when private banks are forced to make bad loans at the government’s request? And what can lenders expect back when the government doesn’t respect private property?
"In 2019, Fortune's Global 500 list of the world's largest corporations included 119 Chinese companies, with combined revenues of US$8.2 trillion (that's 40% of US GDP). That same year, Forbes reported that five of the world's ten largest public companies were Chinese"
Because I could’ve sworn that America was engaging in QE-infinity for the last 12 years. The money printing machines have been running on overtime.
There is no price discovery in the American stock market anymore, because the Fed has distorted everything.
I've heard this POV many times but it seems very hard to believe. Especially with the internet, the knowledge gap is closing or already closed. Capital is now generally available for good ideas, and access to electronics and computing hardware in many Chinese cities is better than in the US.
With 4x the population of the US, many of whom now have access to the whole of human knowledge via the internet, hardware and cheap manufacturing for rapid iteration, how does this not result in change?
It's truly stunning scale and most armchair philosophers here in the US just can't appreciate the scale of it until they actually see it.
This is tinfoil hat territory. The US makes, perhaps, a few 10s of billions from seigniorage of dollars held abroad, but that's a very small number in comparison to the US GDP of approx. 20 trillion.
For a better measure of understanding how economies are operating, look at GDP (PPP).
The US doesn't have a very high GDP because of the dollar reserve currency status. It has a high GDP because it is one of the most technically advanced nations in the world and also has quite a high population. Those things combined enable it to produce a lot of stuff every year.
As for GDP, technology has always been the reason for American GDP. But today, China has caught up technologically and they still have more than 50% of the country yet to develop. That's how much China has left to grow. The direction is clear.
Once the US dollar is not the reserve, the dollar will devalue fast and all the statistics which show US number 1 will be up for correction. GDP is one of it.
Previous countries didn't lose their preeminent places in the world because their currency stopped being the world reserve. Their currencies stopped being the world reserve because the countries lost their preeminent places.
You are now saying something different. That's fine. I think there is some truth to what you are saying now, though personally I don't think the situation is as dire as you seem to. The UK used to rule of the world. It doesn't anymore. It's still a fine place to live.
Merkel even said after the NATO meeting, that Europe can no longer rely on foreign partners. In response to Trumps actions and the UK leaving the EU.
NATO existed to fight off global communism by keeping the Soviet Union out of Western Europe. This was directly in the US national interest because the US didn’t want to face a pan-Eurasian communist front in a future war.
What does NATO do anymore? The US, as the only global superpower with a homeland separated from any potential, conceivable enemy by the two biggest oceans in the world, is largely invulnerable to invasion. And without an enemy with an energizing ideology behind it, what is anyone allied against?
What matters most is trade balance. If somehow a trade is completely balanced, which is quite unlikely, then it's zero-sum.
The problem is that China very rarely has trade surplus with other countries. They often come up with illegitimate reasons to restrict trade to those countries with surplus.
Australia joining free trade agreement with China makes sense because they've sold so much of their natural resources to Chinese companies. Exporting Iron/Coal for example is huge. The free trade agreement with china will give them a surplus that will make Australians quite wealthy.
Climate change will be used to restrict or even eliminate coal use within Australia in order to abuse that situation more. Australia stands to benefit greatly at the expense of China.
Japan on the otherhand? They are still in the midst of a deflationary spiral due to their debt crisis and their trade deficit with China will become worse. The Japanese people are pretending to be wealthy right now and are going to be far less wealthy soon.