Robert Fogel is optimistic about China

In 2040, the Chinese economy will reach $123 trillion, or nearly three
times the output of the entire globe in the year 2000, despite the
influence of several potential political and economic constraints. 
India’s economy will also continue to grow, although significant
constraints (both political and economic) will keep it from reaching
China’s levels.  The projected decline of the EU15’s global share of GDP
means that Asia will be poised to take up the role of promoting liberal
democracy across the globe.

We also are told that the Chinese market in 2040 will probably be
larger than the combined markets of the U.S., EU15, India, and Japan. 
Chinese per capita income will be $85,000, more than twice the forecast
for the EU15.

Here is the paper.  Fogel does argue for his conclusions.  His main point is that simple extrapolation of human capital trends, namely China’s potential for more higher education, and further shifts out of agricultural labor, will get the country most of the way there.   He also argues that after 25 years of 8-10 percent growth, massive bankruptcies are unlikely.  Chinese leaders have, in Fogel’s view, a good strategy for the devolution of power and the co-optation of elites.

If you wish to be brought back to earth, here are my views on the future of China.  I believe it is the only time I have ever used the phrase "business cycle burp" in my writings.  But sadly, Yana and I have yet to make it to Shanghai.  Now that she has graduated from high school, I am hopeful we will get there…

Comments

I always confuse intensive with extensive development. China has heretofore almost exclusively done the one that involves importing technology made elsewhere, rather than inventing new stuff. There's a plateau of wealth that can't be crossed unless you're inventing new stuff--on the other hand, if you're inventing new stuff enough you tend to cross that plateau rapidly.

I question whether the Chinese model can make that transition easily and without social turmoil. If it can, the sky's the limit--if not, there will be indeed a substantial burp.

Wow.

I hope the CCP paid him for that opinion. It's a shame to throw away credibility like that without at least a few crumbs' compensation.

If it were just for his probably unfounded optimism! I once went to a lecture of his on China, and I was appalled: He is an unashamed apologist for the communist regime. He would insist that all those piddling apparatchiks were working hard for the welfare of the masses and were eager to get input from anyone who had something to say - just go to the Tiananmen Square, start shouting that the Chinese system of taxation is a mess and they will get you an appointment at the ministry of finance before you can say Jack Robinson. Not a single word about oppression, numerous strikes, unbridled corruption. The audience had to bring up those problems but he didn't bat an eyelid and whitewashed them. The Chinese listeners in the room were as flabbergasted as me by the message of his speech. I lost all of my respect for him. Several decades ago, pundits of his ilk who extolled the Soviet Union were dubbed "useful idiots". He deserves that label no less.

I'm going anonymous on this one because I happen to be a fairly close relative of Bob Fogel - but I agree with Tyler. China simply doesn't have the liberal intellectual climate in place that would encourage innovation and unfettered growth - which is not to say that it never will, or even that it won't develop such a climate within this century, but it isn't there now and will take a lot more time than Bob estimates.

Without reading the paper, 85000 p.c. by 2040 implies an 11% per capita GDP growth rate over this period, which implies an even faster overall GDP growth rate. Bob is a first-rate economic historian, but surely this is impossible. As Chinese GDP per capita approaches American levels, the only substantial method left of increasing growth is new innovation. Importing knowledge can only take a country so far. If China can maintain a growth rate that incredible over the next 33 years, I'll gladly give the communist regime a free pass. Growing only 7% per capita (which, again, strikes me as too high in the long run) would give China a level of development similar to South Korea by 2040, which would be a major, major accomplishment.

China's 20th-century history is that of a power vacuum, and the violent successive attempts to fill it. The Communists did what their predecessors did not, namely, successfully pass the regime off the next generation.

Looking at the past history of revolutions, there seems to be a crisis after 25-ish years associated with the succession. A system that survives that faces its next crisis after another 50-ish years, about the time that the revolution is passing from living memory. I think the events of 1978 and the successes of the reformed Communist system have bought the current government legitimacy until around 2025-2030. After that is anyone's guess.

Wouldn't the Japanese model seem the most likely for China in the long run -- catch up with the Western Europeans in per capita income, then hit a ceiling?

Chris wrote: "Having lots of young men with no prospect for marriage is never good."

I agree, but this is hyperbole; that there are "no prospects" is gross exageration. The world is full of prospects.

Somehow, I cannot get my mind off that essay on Dow 30,000.

maybe he will half right? probably he will
be half right? what then?

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