The China Bubble

Worries about doing business in China.

If you only listened to the main stream media, you'd think it was inevitable China will take over from the United States as the largest economy on the planet in a mere 20 years or so.  And a cursory look at numbers would suggest you might be right:  1.3 billion people is a lot of people.  At my own birthday party, people gawked and laughed at me when I said China was not an economic threat to the United States.  Remember, this was during the time when it was being reported how much US currency China holds (they do this to keep their wages down and the dollar strong).

But two facts stand out to me:  1)  The US economy is 3x as large as China's.  I don't think most people know this.  3x is a lot of ground to make it.  I bet if you ask joe average on the street, they'd think we are much closer in size and 2) The majority of apartments / living areas in China do not have their own toilets.  It might be up to 70%.  I heard this statistic on NPR from a journalist living in China because he was describing how most Chinese people still view themselves as a poor country.

I'm not trying to be jingoistic or excessively prideful, but explain why we in America ought to be worried about the economic prowess of a nation where the majority of people don't have toilets in their homes.  Come on.  This is a poor place.

As a side factor, the US economy is tied closely to our allies in Europe and the Americas.  It's not like China can suddenly throw their weight around and make everyone do their bidding.  The biggest challenge is basically dealing with China financing a few rogue states or corrupt governments by buying their natural resources, places like Iran or Nigeria, etc, and then possibly throwing their weight around Asia a little more than they already do.  That is our concern.  Not that suddenly China can dictate world economic policy at our expense.