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In 2040, the Chinese economy will reach $123 trillion, ornearly three times the economic output of the entire globe in 2000. China's percapita income will hit $85,000, more than double the forecast for the EuropeanUnion, and also much higher than that of India and Japan. In other words, theaverage Chinese megacity dweller will be living twice as well as the averageFrenchman when China goes from a poor country in 2000 to a superrich country in2040. Although it will not have overtaken the United States in per capitawealth, according to my forecasts, China's share of global GDP -- 40 percent -- willdwarf that of the United States (14 percent) and the European Union (5 percent)30 years from now. This is what economic hegemony will look like.
Most accounts of China's economic ascent offer little butvague or threatening generalities, and they usually grossly underestimate theextent of the rise -- and how fast it's coming. (For instance, a recent study bythe Carnegie Endowment for International Peace predicts that by 2050, China'seconomy will be just 20 percent larger than that of the United States.) Suchaccounts fail to fully credit the forces at work behind China's recent successor understand how those trends will shape the future. Even China's own economicdata in some ways actually underestimate economic outputs.
It's the same story with the relative decline of a Europeplagued by falling fertility as its era of global economic clout finally ends.Here, too, the trajectory will be more sudden and stark than most reportingsuggests. Europe's low birthrate and its muted consumerism mean itscontribution to global GDP will tumble to a quarter of its current share within30 years. At that point, the economy of the 15 earliest EU countries combinedwill be an eighth the size of China's.
This is what the future will look like in a generation. It'scoming sooner than we think.
What, precisely, does China have going so right for it?
The first essential factor that is often overlooked: theenormous investment China is making in education. More educated workers aremuch more productive workers. (As I have reported elsewhere, U.S. data indicatethat college-educated workers are three times as productive, and a high schoolgraduate is 1.8 times as productive, as a worker with less than a ninth-gradeeducation.) In China, high school and college enrollments are rising steeplydue to significant state investment. In 1998, then-President Jiang Zemin calledfor a massive increase in enrollment in higher education. At the time, just 3.4million students were enrolled in China's colleges and universities. Theresponse was swift: Over the next four years, enrollment in higher educationincreased 165 percent, and the number of Chinese studying abroad rose 152percent. Between 2000 and 2004, university enrollment continued to risesteeply, by about 50 percent. I forecast that China will be able to increaseits high school enrollment rate to the neighborhood of 100 percent and thecollege rate to about 50 percent over the next generation, which would byitself add more than 6 percentage points to the country's annual economicgrowth rate. These targets for higher education are not out of reach. It shouldbe remembered that several Western European countries saw college enrollment ratesclimb from about 25 to 50 percent in just the last two decades of the 20thcentury.
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http://www.foreignpolicy.com/articles/2010/01/04/123000000000000
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