Carnegie Endowment makes conservative prediction of China overtaking the US Economy in 2035

Here is 16 page briefing from the Carnegie Endowment by Albert Kiedel on the economic rise of China

UPDATE: The British Telegraph has an interesting series of articles on life in China now

The very conservative projection described in the table above already underestimates China’s economy. It has China at $4 trillion on an exchange rate basis in 2010.
This site estimates that China is at that level in late 2008 (and already if Hong Kong and Macau are included which they should as part of China since 1997 and 1998).

As of July, 2008 :
China’s currency is now 6.85 yuan to 1 USD. China’s GDP is now $3.85 trillion. Including Hong Kong and Macau China has $4.2 trillion GDP.

Year GDP(yuan) GDP growth Yuan per USD China GDP China+HK/Ma US GDP
2007 24.66 11.9% 7.3 3.38 3.7 13.8
Jul08 26.3 6.85 3.83 4.2 Past Germany
Oct08 26.7 6.65 4.0 4.45
2008 27.3 10.2% 6.35 4.3 4.8 14.0
2009 30.1 9.8% 5.62 5.4 5.9 14.2 Pass Japan
2010 33.7 9.5% 5.11 6.6 7.1 14.6
2011 37.0 9.5% 4.64 8.0 8.5 15.0
2012 40.6 9.5% 4.26 9.5 10.0 15.4
2013 44.2 9.0% 3.91 11.3 11.8 15.9
2014 48.2 9.0% 3.72 13.0 13.5 16.4
2015 52.0 8.0% 3.54 14.7 15.2 16.9
2016 56.2 8.0% 3.53 16.7 17.2 17.4 Passing USA
2017 60.4 7.5% 3.38 18.8 19.4 17.9 Past USA
2018 64.2 7.0% 3.20 20.9 21.5 18.4
2019 69.2 7.0% 3.09 23.0 23.6 19.0
2020 74.0 7.0% 3.0 25.2 25.8 19.6
2021 78.4 6.0% 2.9 27.2 27.8 20.2
2022 83.1 6.0% 2.9 29.4 30.0 20.8
2023 87.3 5.0% 2.8 31.5 32.2 21.4
2024 91.7 5.0% 2.8 33.7 34.4 22.0
2025 96.3 5.0% 2.7 36.1 36.8 22.7
2026 101.1 5.0% 2.6 38.7 39.4 23.4
2027 106.1 5.0% 2.6 41.4 42.1 24.1
2028 111.4 5.0% 2.5 44.4 45.1 24.8
2029 117.0 5.0% 2.5 47.5 48.2 25.5
2030 122.8 5.0% 2.4 50.9 51.6 26.3 Close to double USA

China’s inflation and internal pressures are causing Chinese leaders to increase the value of the yuan over the mid and long term

China is engineering a pause in the yuan appreciation to curb speculators who are profiting on the rise of the yuan

Since last October interest rate differentials between dollars and yuan have reversed. The U.S. Federal Reserve aggressively lowered rates just as the Chinese central bank, the People’s Bank of China, was pushing up domestic rates to fight inflation. Currently, rates on the Chinese central bank’s one-year bills are about 170 basis points higher than comparable U.S. Treasuries.

This has created an arbitrage opportunity that local firms are exploiting on a massive scale, borrowing cheap dollars to substitute for more expensive borrowings in yuan and for local investments. A second factor driving this arbitrage is the wide-spread expectation that the government will either speed up the rise in the yuan’s crawling peg or implement a one-off revaluation.

Li Jin (Harvard) and Shan Li (former CEO of Bank of China International) suggested in the Wall Street Journal that China slow currency appreciation and invest funds in the US to help deal with China’s inflation and stabilize the US economy

Previous economic update on China

Highlights of the Carnegie Endowment economic rise of China

Other Keidel analysis of China

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A lot can and would be done with earthly applications. However, I was focusing on space in 50 years and the critical technologies for determining what could happen.

Societies need to adjust the money allocation process so that at least 0.1 to 1% goes to developing many technology projects for long term benefit (a hundred times more than now and what money is made available goes into a few big projects based on politics). There also should be more open shared resources available for anyone to develop projects. Open supercomputers and labs.

Shrinking population is a definitely a slow motion thing, which could be viewed as a long term significant fluctuation at this point. Just like previous projections of continuing trends in population increase were not accurate, assuming that shrinkage and lower birth rates will continue is not accurate.

I think that population is slowing as we get into the range (25-50%) of carrying capacity, plus changes in society (women's rights, increased wealth, better life expectancy - no need for 4-5 kids to ensure that 2 make it, insurance etc...) may see more changes that swing the pendulum the other way.

Nanotech and other future tech can increase the carrying capacity of the earth by 10 times or more even with higher standards of living(habitable deserts, oceans, higher density cities, high rises)

Life extension could make big breakthroughs. So that 56 million people do not die every year and people could change reproductive patterns for 1-2 children every 20-50 years and the same person being able to reproduce again.


With the possible exception of the nuclear rocket technology, I think that all of these projects could sell themselves based on their earthly applications, assuming people can be convinced that the goals are achievable. Not that we could not or should not develop nuclear rockets but they are a type of project that would likely require special funding from a source that is at least one step removed from both the electorate and dependence on market revenue.

Actually, some of these projects would be so useful as to make near term space flight a minor benefit in comparison.

One other "catastrophe" that I have begun to wonder about is the possibility of a demographic contraction. It seems that even poor regions are seeing their population growth rates shrink. This seems to be happening even faster than it did in industrial nations. While this will have benefits like less agricultural land needed, lower energy requirements and a greater impulse to invest in productivity improvements, would it not also leave smaller markets, fewer investors and a generally less powerful civilization once the effects of a shrinking population begin to be felt? Space colonization seems to be a collection of products and services and if there are not enough consumers to make these products and services marketable it might be a tough sell.