U.S. Is No. 1, China Is So Yesterday | Hacker News Reader

U.S. Is No. 1, China Is So Yesterday

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92 pointsjamesbritt65 comments

I'm old enough to remember the threat of the Japanese economy during the 1980s. Joe six-packs smashing Japanese electronics in front of the Whitehouse. Calls of "Americas glory days are over" were heard over and over. And yet here we are today.

The current way I interpret news articles that proclaim huge shifts in the world is this: if the article takes any short-term trend and applies it over a future time period I immediately discount it.

I'm waiting for the next new article "American teenagers grew an average of 10 inches in 3 years, if this trend continues, American will be an average of 13 ft tall in 2050!!!"

How do you interpret articles which proclaim that other articles proclaiming huge shifts are overblown?

Because that's what this article is doing.

Japan's per-capita GDP did surpass that of the USA for a while and it is plausible (mathematically speaking) for it to do so again:

https://www.wolframalpha.com/input/?i=japan+gdp+%2F+japan+po...

Per-capita GDP does not matter in the power contest. There are countries that have GDP/capita twice the size of US's: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_%28nom...

Luxembourg does not count, has never counted and will never count. Therefore this evidence is inadmissible. I thank you !

Yeah, I remember too. Detroit was having a tough time.

http://en.wikipedia.org/wiki/Roger_%26_Me

Middle class jobs were leaving America and Reagan pushed the national debt over $1 trillion dollars. And college tuitions were skyrocketing. Tufts students were complaining about an $8,000 a year tuition.

http://www.thecrimson.com/article/1980/2/25/students-at-tuft...

...Fortunately, everything has turned out swell.

http://admissions.tufts.edu/tuition-and-aid/tuition-and-fees...

http://en.wikipedia.org/wiki/Detroit_bankruptcy

http://useconomy.about.com/od/usdebtanddeficit/a/National-De...

Yeah - I went to a rust-belt high school in the 80's, and remember all the excessive pessimism. On my return visit this spring, I got to see how the story unfolded.

Burned out buildings. Unpaved streets. City reverting to wildland.

Things truly fell apart. The center could not hold.

To some extent, we always have to extrapolate from the short-term into the long term, but the point is to remember that we are doing so, and to reduce our confidence accordingly.

Still, I love XKCD's take on it:

https://xkcd.com/605/

>Calls of "Americas glory days are over" were heard over and over. And yet here we are today.

Yes, here we are today.

With the economy in a bad shape, jobs that wont be coming back, a huge public debt, a crushed middle class, fewer prospects for the younger generations. And Japan, who faced a similar shakedown, still going strong, but replaced by China as a main US competitor. A country, who, unlike Japan, is not under supervision, but a superpower on its own.

I guess people were expecting something like complete ruins or some post-apocalyptic landscape to consider decline a real thing? It's not like somebody comes in and in a couple of decades steals peoples houses and things. It's that slowly, their status and prospects is declining over what it used to be. It's not something you can watch happening in real time, like a fire burning down a house. It's more like watching paint dry. It's slow, but it does dry.

Foreign Affairs[1] published a similar article by the political scientist Samuel Huntington some 25 years ago that makes many similar points, the major difference being that China has replaced Japan as the rising power. Perhaps in 10-15 years, there will be predictions of India as the new number one.

China's demographic time bomb has been predicted for some time. The one-child policy combined with factors like de-ruralization and widespread female infanticide and abortion will make China's population implode dramatically by about 2060 to less than a billion and continue declining through the end of the century[2].

Meanwhile, the U.S. is projected[3] to grow to 400 million by that time [EDIT: by 2060]. With a relatively young population in the industrial world, and a uniquely high immigration population, the U.S. is more like a developing nation than the other industrial powers, demographically speaking. Youth brings new ideas and energy, something that is an essential factor in economic growth.

China's elderly population is growing and will become a huge burden by the middle of the century, which will sap its wealth and probably prevent it from achieving the "number one" status that some are predicting.

Declinism is a cyclical phenomenon in the U.S. that is not without merit given our social and financial problems, but it must be viewed in perspective. The debts are possibly the biggest problem facing the country, but new trends are going to counter that debt and possibly ameliorate it: a coming boom in domestic energy production, a return of manufacturing to the U.S. driven by robotics and 3-D printing technologies, continued software dominance, and a culture of risk taking and open mindedness. I think there's still a lot of upside to the U.S. as a predominant power in the world.

1. http://www.foreignaffairs.com/articles/43988/samuel-p-huntin...

2. http://www.china-profile.com/data/fig_WPP2010_TotPop_Prob.ht...

3. https://www.census.gov/population/projections/data/national/...

>>Perhaps in 10-15 years, there will be predictions of India as the new number one.

Already happening... http://www.themoneyillusion.com/?p=7402

This seems like just another case of "mine is bigger than yours is"....

Of course the US's economy is still bigger. A large part of this economy is also nonsense (see... legal fees). A large part of China's economy is nonsense also. Empty structures, excessive stimulation etc.

I look forward to the day when the realization that the planet is really small and all of us are in this together is common wisdom. Until then I guess it's foolish cock waving which occasionally turns into shooting and wanton squandering of non-renewable resources.

Step back to look at this story not as "Who's #1" (who cares), but instead "Is the US moving in the right direction to keep pace with the developed world?"

Here is the real key quote: "This serendipitous story will continue, but it comes with a warning: The U.S. has to remain open and welcoming."

> "Is the US moving in the right direction to keep pace with the developed world?"

Given The US is at or very near the worst among OECD countries in a whole bunch of measures, I would say no.

About the author: http://en.wikipedia.org/wiki/Josef_Joffe.

After I read through Edward Bernay's Propaganda, I can't take this writing seriously. It seems to be some overly patriotic horn tooting, meant for pushing academics even further from the real problems we are facing.

No where does he explain why America became a large economy or why it should even stay that way.

As far as I'm concern, America is contributing less and less to the world. There is no reason for the world to give such high value to the dollar and continually send goods to America (things that have no reason to, will not continue for long).

And if you want to talk about dollars (or lack there of). Please refer to the public and private debt of America and its citizens.

Some things are just plain wrong: "home to the U.S. ... in tandem with plentiful cheap energy from fracking."

http://www.theguardian.com/environment/earth-insight/2014/ma...

This guy reminds me of other infamous propagandists, such: https://en.wikipedia.org/wiki/Daniel_Pipes and his equality notorious father: https://en.wikipedia.org/wiki/Richard_Pipes

What are the factual parts of his position that you actually disagree with? I think he makes some very good points that commentators tend to ignore the inevitable diminishing growth curves and China's impending demographic crisis when talking about China overtaking the U.S.

These are facts:

1) China's population of 20-24 year olds started declining, in absolute numbers, at the beginning of this decade. In order to avert demographic crisis, China will have to do something almost unprecedented at scale: increase population growth rate during a period of increasing living standards and education.

2) The U.S. has double the domestic oil production of China, and that figure is trending up thanks to utilization of shale oil: http://www.bloomberg.com/news/2013-11-12/u-s-nears-energy-in.... Both are net oil importers, but China has to figure out how to accommodate explosive growth in demand, while demand in the U.S. is steady.

3) The U.S. still has an overwhelming advantage when it comes to R&D and production of IP. The top universities that engage in cutting-edge fundamental research are still mostly in the U.S.

There is a shade of patriotism to his writings, but it seems to me to be mostly a response to an overly pessimistic narrative on the other side.

1) This is a Legitimate problem for China, but how can we assume that the USA will be the world's superpower, when China does encounter this problem? 2050 is a long way from now. It is likely that another nation will take the role of the #1 economy.

Beyond that, how do we know the environmental impact caused by the industrialization of China will not reduce the average life expectancy (cancer, etc.)?

2) Much of the shale oil extraction has been financed through low interest rates and debt. The cost of extracting many of these oil reserves is more than the worth of the oil itself.

"Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back."

http://www.bloomberg.com/news/2014-02-27/dream-of-u-s-oil-in...

http://oilprice.com/Energy/Natural-Gas/Shells-American-Woes-...

3) This is hard to argue against. I have a few concerns: a) The profits from the R&D and IP are usually concentrated in the hands of large corporations with large patent portfolios. These corporations are global and not beholden to the USA (they can move work aboard). The profits of these corporations are increasing being moved towards the hands of the few.

b) The education system in the USA for the majority, has been far from stellar. There is an opening for another country to surpass the USA in education and academic institutions.

c) As China moves away from an export driven economy, they can take the role of R&D and IP. China is working towards this. I'm not sure if they can succeed.

http://www.nytimes.com/2013/01/17/business/chinas-ambitious-...

> overly patriotic horn tooting

The word you are looking for is "chauvinist".

"As far as I'm concern, America is contributing less and less to the world. There is no reason for the world to give such high value to the dollar and continually send goods to America (things that have no reason to, will not continue for long)."

Unless you provide reasoning as to how you've reached this conclusion you just come off sounding a bit pompous and self important. (BTW I agree with your initial point that this suffers from unnecessary hubris)

What's interesting about this is the trend of developing countries that initially have massive economic growth looking for a while like they might overtake the US, but never actually making it. I'd contend that it's the role of the fundamental openness and liberalness of US and European society that fuels the level of innovation needed to really make it to first-world level.

Developing countries are often saddled with terribly oppressive, corrupt, and inefficient governments and societies. They can develop a strong manufacturing economy without really changing that, but getting beyond that to a modern innovation/knowledge economy seems to require deep societal changes that are difficult, time-consuming, and often involve the downfall of the people currently in power there.

Both methods seem pretty far from ideal, however, if US has more "economic power", but that economic power is largely because of a few (hundred) rich people getting ever wealthier, while everyone else in the country feels increasingly poorer, is it really "better"? I think this gap will only widen in the future, thanks to technology, with few "stars" becoming billionaires overnight, while millions lose their jobs to automation.

There is however another factor that should be counted, and that is living conditions, which obviously favors US. So maybe something close to an ideal index for how rich a country is should include total economic power + price purchasing parity + living conditions level.

1. Automation would hit Chinese workers harder than Americans.

2. PPP incorporates living conditions already. GDP@PPP is already standard.

It's interesting to note that people always leave off the other end of the wealth inequality figures. - http://en.wikipedia.org/wiki/File:Share_top_1_percent.jpg

The top 1% share is roughly the same now as it was in the 1930's. The "Great Compression" afterwards was largely fueled by government regulation (as best as I can understand it - not being an economics guy) so I'm not convinced that the gap will continue to grow.

Keep in mind that the wealth inequality in historical norms is spectacularly low. Yes, it was lower for a while due to WWI and, especially, WWII. The situation, in relative terms, is still much better (20-30% more equal compared to the beginning of the 20th century, hundreds of percents compared to before) for the poor than it ever was before. In absolute terms the situation for the poor is so much better it's not funny.

Not saying we can't do better, but we're actually not doing all that bad at all. Of course, it's moving in the wrong direction.

I disagree with the government regulation thing. It's true, yet it's so wrong as to mislead. The government did institute draconian regulation on businesses which lead to decades of limited profits or even losses, but it did so because of the wars. So the government is responsible for inequality reduction in the same way that an engine is responsible for a car's acceleration. The decision for the acceleration was made by the driver, and the driver for these policies was war. Without a doubt, no sane person, poor or rich, wants a return of these policies, no matter how much they'll reduce inequality.

I think you'd have trouble arguing that US involvement in WWII wasn't dictated by government regulation (Lend-Lease and the Japanese Oil Embargo), but the point was more that it's not an irreversible trend.

Presumably if there's some optimal wealth inequality based on our technology level/social structure/ect. we'll naturally trend towards it on a long enough timeline.

The most influential Chinese entrepreneur Jack Ma (founder of Alibaba) commented recently in China that his primary impression of USA was the ability of strategic thinking. Being very familiar with both countries, I have the same impression. I used to call it rational thinking. In my observation, the best strategic thinkers will win the long term races of the countries, as well as businesses.

"China’s demography is a disaster. About 2015, the seemingly boundless labor pool will begin to shrink. One reason is rapid aging, which presages that China will become old before it becomes rich. By 2050, China will have lost one-third of its working-age population. Meanwhile, the U.S. will bestride the earth as the youngest industrialized nation after India."

The main question is: can China's population become specialize faster than it ages? My intuition says it will, and even if the "boundless labor pool" is drained, it will still have ~20% of the world's work force. By then probably higher skilled than now.

It's 2014. China could produce a lot of young talent between now and then if it changed policies to pursue that goal.

If they can feed them, yes.

It's very hard to affect demographics to produce more babies after demographic transition is complete. Or are you talking about investing in education?

no it can't, not enough women :(

https://www.wolframalpha.com/share/clip?f=d41d8cd98f00b204e9...

Maybe this will help spur the robotic revolution? Who cares how many young people there are as long as the work is getting done?

China's struggle is going to be the same one we see from other export driven economies, shifting from "fast follower" manufacturing centers to more R&D focused economic leaders. This is not an easy shift to make.

Right now, the big East Asian countries, China/South Korea/Japan are struggling with adapting their education systems to a model that encourages risk taking and creativity, things required to carve new niches and drive economic leadership.

It's happening, but slowly, Japan is very close/already there in many cases but struggles understanding foreign consumer preferences and it's not across the board. Korea seems to have identified it as a necessary growth area and is making massive investments in design centers and other "creative capital" investments -- something like $100 billion so far already invested into making Seoul a global destination regional design city.

I think there's more to demographic destiny than constantly growing populations. For example, the 'demographic dividend' is a double-edged sword, resulting in economic growth if enough jobs can be created or the potential for massive unrest otherwise. (This is one problem which India and much of Africa is grappling with.)

At the same time productivity per worker has gone up dramatically in many industrialized and industrializing countries, even as (and in some cases because) of automation becoming more and more widely adopted. On one hand we're having discussions about how to handle large numbers of workers rendered redundant because of automation destroying jobs (e.g. guaranteed minimum income); on the other hand we're predicting that an economy won't have enough workers to fill all the jobs that will be created because of demographic trends. These things are contradictory.

Comparing "the US" and "China" is comparing apples and oranges. China, like the rest of East Asia and most of Europe, is an ethnic-based country, whereas the US, like Australia, Brazil, and even the UK and France, is an immigration-based country. Generally, Americans don't become Chinese, nor would they want to. That's the key for why the US will remain tog dog. Of course, there's other factors: the US military control of the world's oceans, and the under-utilization of the Mississippi compared to the Yangtze or Ganges. Talking about China's skewed population distribution or lack of innovative freedom are effects, not causes, of the ethnic- or immigration-based nature of the two countries.

China is actually quite diverse, both linguistically and ethnically speaking. Also, as regards immigration, China is beginning to able to attract foreigners to their research institutions. Money wins. The U.S. would be wise to re-learn this lesson.

U.S. is number one but the kind of welfare path it has chosen it remains to be seen when the real sinking of US starts.

The case with China is slightly different. They are not a democracy and hence can afford to spend lot more money on tanks and nuclear warheads while millions rot in poverty. This is not possible for a country like India. So as Chinese economy grows its global influence is going to grow more exponentially than say that of India. Countries who become global powers try to impose their worldview on others for example US has pushed democracy everywhere and I am reasonably sure China is going to put "state knows the best" attitude everywhere they go.

> By 2050, China will have lost one-third of its working-age population. Meanwhile, the U.S. will bestride the earth as the youngest industrialized nation after India.

How are we divining the mating habits of people born in 2020 to 2030's US?

By assuming they evolve in the same way they've been evolving since WWII. While it may not look like it in San Francisco, but there are huge groups in the country, white and non-white that are having quite a few kids. Not enough to make population rise, but enough to keep it stable. It seems a vast number of people prefers a small city or medium city lifestyle with 3 kids. The weird thing is that this will make the experience of so many San Franciscans today a feature of the first half of the 21st century too. A hell of a lot of new immigrants will come from a pretty strict religious background and feel like releasing some steam in their early twenties. The influx of people like that should continue for another 20 years at least.

So the assumption is that the population of the US will continue to climb slowly due to natural growth, accelerated a little bit, but not much, by immigration.

Now if you look at the EU or China, they have a very different story. The EU has been stuck in a massive population drop rate (roughly approaching next generations being 50-70% of the previous generation for all of Western Europe, coupled with massive immigration numbers that make the numbers barely stable). That means that in a lot of countries in Western Europe, approaching 50% of the <20 population is of foreign origin, first or second generation, mostly from Northern Africa and the middle east. These numbers look scary, yet in the major cities, Paris, London, ... they look a lot scarier still. If the "unemployed youths that don't fit into society leads to revolution" crowd is correct, Europe has maybe 5-10 years left before that happens. There may be a further delay because of the simple fact that European mistreatment of the poor is still a lot better treatment than islamic nations' treatment of the middle class and the rich. So the immediate immigrants are actually quite content to be abused. Their children, however, are not.

China is in a pickle. They need, absolutely need, a lot of population growth to avoid disaster, but in absolute numbers everything they built is filled to the brim. They are trying to use the "one child policy" to spread out the population by relaxing it for ethnic Chinese in the outer regions, like Xinjang or Tibet. So if you are Chinese and want kids, if you move there and get a job there (Chinese control most businesses and employers are at least somewhat racist, so it's not impossibly hard), the government will let you do that, up to 5 kids in some places. The purpose is, of course, slow ethnic cleansing, but given that it's China, the UN will never even mention it.

You are just completely wrong.

http://en.wikipedia.org/wiki/One-child_policy#Current_status

Rural Han Chinese can have up to 2 children. Minorities can have up to 4 in rural areas. Tibetans are unlimited.

You need to retract your comment. Everything in your last paragraph is false and brings question to everything you've written.

"the government will let you do that, up to 5 kids in some places."

This is not true, actually if you are Han people, no matter where you move to (within China), you still can only have one child unless you married to "ethnic minority" who no need to follow "one child policy".

I call [citation needed] on your EU demographics. The EU has not been "stuck in a massive population drop rate": the EU population actually grew by 3.7% between 2002 and 2001, with only 6.3% born outside of the EU. And Eurostat forecasts the population to grow very modestly between now and 2060. (Source: http://en.wikipedia.org/wiki/Demographics_of_the_European_Un...) Of course, those predictions don't mean all that much, since "demography is destiny" only in retrospect: growth trends can and do change. (E.g. the French birth rate has gone up in recent years.)

To be honest, I think you may have read too much Mark Steyn. There is little cause for demographic apocalyptics, including the tired "Muslims are going to revolt/take over" kind. In fact, a flat or slightly declining population is probably a blessing (e.g. from an environmental perspective).

The oroblem with non-whites not quite fitting in is real, though, and much worse than in the US. Besides color, muslims are pretty hard to assimilate, so there will be not only color-based racism but also cultural ethnocentrism.

Imagine you have the problems of economic class and then add another dimension of cultural class. Society becomes much more fragmented. The new dimension is not really worse than economic class, but class alone is already unpleasant. It will turn out all right, I guess, but there will be minor persistent problems for a long time.

You should note I make a difference between natural population growth and immigration. The EU's natural growth is nothing short of disastrous, and this is made up for with immigration.

The age distribution in China is not that far off from the US[1]. This gives China a similar entitlement expenditure per person as in the US, but without the same level or distribution of income.

US population growth has been outpacing China and Europe for the last decade [2]. If trends stay about the same (no plagues, massive wars, or other major changes in population), the population growth happening today will translate to growth in the work force 20 to 30 years from now. Note: population growth includes immigration, which is something the US experiences more of than China or Europe.

In a nutshell, we expect the Chinese demographics to shift older faster than the US. This raises questions on how China will fund services, entitlements, etc 30 years from now (which is what I imagine Joffe was getting at).

[1] http://www.indexmundi.com/factbook/compare/united-states.chi...

[2] http://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&m...

The real challenge for us Chinese is education system.

There's much focus on the economic statistics here but I do think the most important component is the political one. China is a one party state run in a totalitarian manner. No totalitarian state has ever lasted for an extended period of time. So China either becomes the 1st to pull that off or has the mother of all lost decades as it transitions to a Western like democracy.

>>No totalitarian state has ever lasted for an extended period of time.

Compared say to democracies in the US/UK/France etc that are 100 or more years old. Trying to think of totalitarian equivalents that have lasted into a country achieving 1st World status?

Every single first world country was either already a democracy before industrialization ("the west"+Turkey), was totalitarian until it was invaded by the US and forced to become democratic (Japan, Germany, Korea, Austria), or is comprised of people who fled a totalitarian nation to found their own democratic nation next door (Taiwan).

Did I leave anyone out?

PPP makes a lot of sense if you compare GDP per capita. If you compare total GDP, using PPP makes no sense.

Yes, keep telling yourselves that.

US is #1 at caring about being #1. (we'll see if this shifts to whatever next country becomes #1)

> U.S. education is always said to be in crisis. But 17 of the world’s top 20 universities are in the U.S., and 34 of the top 50.

Yes, we all know that the smart and/or rich/connected have ample opportunity in the US. But that says nothing about the median.

Having studied at both a cheap state university and also one of the famed "top 20," I'd wholeheartedly argue that the educational opportunities at the two were similar if not the same.

The degree from the latter is potentially worth more in the job market, but the level of education you come away with is largely a matter of personal drive - especially now that information is so readily available everywhere.

> Having studied at both a cheap state university and also one of the famed "top 20," I'd wholeheartedly argue that the educational opportunities at the two were similar if not the same.

Which I guess means that people living in other countries than the US may be getting a good education despite being, you know, not in the US.

> US is #1 at caring about being #1

That seems like a bit of an overstatement[0] considering all the categories that the US isn't #1, e.g. Life expectancy (#49) [1]. Granted, these rankings are quite old, but you can pretty easily find others, for example Hans Rosling's presentations on health care.

EDIT: This is not a dig at the US as such. I just think it's time for a reality check for many people.

[0] Or, rather, the US doesn't seem to be very effectual at improving the situation.

[1] http://en.wikipedia.org/wiki/International_rankings_of_the_U...

Actually, the US probably does lead in life expectancy... As usual, you can make the data do anything you like, but this methodology makes a lot of sense.

http://blogs.wsj.com/numbersguy/does-the-us-lead-in-life-exp...

I may be off my rocker, but it seems kind of weird to specifically discount murders and such when calculating life expectancy. I mean, I get that the health care system probably can't have much effect on murder as a cause of death, but life expectancy is life expectancy no matter what eventually ends up killing you.

(My reference to Hans Rosling was more of an aside, I didn't mean to conflate average life expectancy with the standard of health care. I apologize if that wasn't clear.)

You're totally correct, but so is the paper discussed in the WSJ link.

Different measures of life expectancy for different purposes.

It's a bit like the inequality data "showing" that the US has higher post-tax&transfer inequality than does France. -News flash- nations with stronger social safety nets have stronger social safety nets!

It seems that the pertinent measure would be pre-tax&transfer income inequality... a measure which just so happens to show the US and France have identical GINIs. But you won't read that in the NYT...

> That seems like a bit of an overstatement[0] considering all the categories that the US isn't #1[...]

I wrote caring about being #1. Not necessarily being nr. 1.

This article is poorly written and researched, full of grandiose language & hyperbole with little to no justification. For example:

"China’s demography is a disaster ... by 2050, China will have lost one-third of its working-age population"

Grandiose hyperbole substantiated by the fact that in 35 years, people will be older!

"China’s politics are wrong"

"jobs will come home to the U.S...(due to) plentiful cheap energy from fracking"

No need to pander.

Loss of 1/3 working-age population is due to central family planning by chinese government.

Exactly what I'm talking about! Their one child policy has already been eased: http://online.wsj.com/news/articles/SB1000142405270230328990...

Either a) the author knew this and didn't think such a major policy shift was worth addressing or b) was ignorant.

This is what I mean - the article was poorly written / researched. China has many problems, the article doesn't have any substance. It's divisive, and inaccurate in several key "facts".

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