The most spectacular economic miracle has been flying under the radar for two decades now, but its impact will be universally acknowledged very soon. This is the story of China. The flip side of that miracle is a coalition of a superpower and former empires, straddled with shrinking middle class, rising debt and dwindling hegemony. This is the story of America and Europe. Let’s take a look at these stories and see how they’re intertwined.
Most people still think of China as a “communist,” polluted, poor country that either makes cheap stuff or assembles expensive products for western corporations. In terms of GDP per capita, China is ranked 70th in the world, below many Latin American countries. And there are 40 million Chinese who live on less than $2 a day.
However, 87% of Chinese say their country is going in the right direction (that number is 43% for America). Why? Without much fanfare, China has become a global powerhouse. China’s GDP is now the 2nd largest in the world. China is also #1 in the world in foreign-exchange reserves – worth more than $3 trillion, including $1.2 trillion of U.S. treasury bonds. Can’t be that poor, right?
If you had shown the chart below to experts back in 1992, they would’ve laughed at you! China’s growth in the last 25 years is simply astounding.