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…


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