China Is Becoming The Next Superpower
The history of America is vast but certain years made a mark. 1898 was the year they won the Spanish American ball and Cuba came under her temporary control. This was the start of the US becoming a world Superpower.
Since this period, the US has grown to enjoy a relatively strong period of retaining this power.
Welcome to my blog, home of all things stock investment, money management, financial freedom and lifestyle. I am your host, and today my topic is China is on the road to being the next world Superpower.
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China is building its economy, power, and influence globally
Statistics of a thriving China
You know a country’s strength through its Gross Domestic Product, GDP. This is a basic measurement of how much production a country has made in a year.
Going back to the last ten years, China’s economy has been growing at a higher rate compared to the US. In the year 2019, China had a GDP growth of 6.1% compared to the 2.3% the US had, almost three times the growth amount.
For more than 30 years, there have been discrepancies in terms of economic development. Yet, China is at the point of catching up now. The latest GDP figures of the US is $24.1 trillion compared to the $14.1 trillion China has.
This implies that there’s a nominal GDP difference of $7.3 trillion to catch up with the US.
Unlike the US, they are expanding at a faster rate. This is why people forecast that by 2030, China will overtake the US in terms of total production. It’s important to review both countries as a whole.
In terms of population, China has about 1.4 billion while the US has about 330 million people, meaning China has four times more people than the US. Essentially, a single man working in the US will equal four men working in China.
This is one of the reasons they are growing when compared to the US. There is more workforce. This is why someone like Elon Musk is predicting the economy of China to be twice that of the US economy. Because of the resources, China can produce and sell a lot more than they are importing.
Visit shops and a good number of products have the “made in China” logo. This is because they have an available workforce and resources for the production of these items.
In terms of trade, the US has a deficit according to figures from 2013 to 2018. The US has less export of goods than the number of goods imported from China. This is traceable to the mastery in production China has.
Again, these items are produced at cheaper costs. China is not only good at selling to the US but the rest of the world. This brings China a lot of money.
The Chinese also invest any spare cash. They love investing in real estate globally. They have huge investments in the US, owning $1.1 trillion of the US debt. The Chinese government loves infrastructural investments because it increases their power.
Look at the $1 trillion plan to take over the global trade. The one belt one road system which has been under development for the past seven years.
It’s a global infrastructure development plan to invest in trade throughout 60+ countries. They are constructing trade routes across land and sea and connecting all to China.
The Chinese government termed this initiative as “A bid to enhance regional connectivity and embrace a brighter future”. Some see this as a plan to dominate the world.
The potentially participating countries in the one belt one road system account for 62% of the world’s population.
Also, they account for more than 30% of the world’s GDP. Then there is the 5G introduction. They are working tirelessly to be the first to have a 5G nationwide network.
A Chinese company, Huawei, linked with the Chinese government, has planned to develop the 5G network for a range of countries globally.
This will not only be profitable to China but will also give them access to billions of individual’s information.
Previously, US companies have been the biggest globally when it comes to Social media. I am talking about Facebook, Instagram, Twitter, and more. But recently, China developed an app with global recognition, Tik Tok.
Even in the US, it’s the number one most downloaded app, despite not being an American Company. This indicates how strong China is becoming in the aspect of innovation and technology.
Reasons China might still not make the Superpower position.
It isn’t guaranteed that China will become the next superpower, even with three predictions from the likes of Musk or Raymond Dalio.
It’s essential to talk about the Chinese government’s intervention which may slow down the process. Since its government plays a strong role in everything relating to business or finance, this implies that any business done with the Chinese company will have some intervention from the government.
Another reason that could slow down China’s potential to become the next superpower is that it has stolen trade secrets from T-Mobile and other companies.
And besides, no nation will choose to work with a communist ruler. This is unlike the US that adopts the democratic rule of government which gives ideals of freedom and liberty. Lastly, the Chinese are not well settled in terms of domestic issues.
With a population of over 1 billion, resources are consumed in excess.
Again, they have an ageing population that is not balanced and young people seeking to leave the country for greener pastures.
In the aspect of trade, tech, and production, China is doing well, but they’ve got a lot of problems to overcome as well if they want to become the next superpower.
There is indeed a lot of speculation about China becoming a world superpower. Yet we can only watch and see what unfolds. What is your opinion about this country, its dominance rate and its increased power? Share your opinion in the comment.
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For more information regarding investment, you can take a look at When Researching Investment Targets Avoid These 5 Things
Recommended for further reading:
- Intelligent Investor: The Definitive Book on Value Investing – A Book of Practical Counsel
- The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns (Little Books. Big Profits
- Stock Market Investing For Beginners: The Investment Guide – How to benefit from the crisis, invest in stocks and generate long-term passive income incl. ETF and Stock Picking Checklist
- The Stock Market Investing Guide #2020: From Beginner to Intelligent Investor within 30 Days – How to Save Money, Generate Passive Income and Reach Financial Freedom
- The Financial Times Guide to Investing:The Definitive Companion to Investment and the Financial Markets: The Definitive Companion to Investment and the Financial Markets