Dave Porter Weblog: Carnegie: “China’s economic size will match America’s by 2035 and double it by midcentury.”

July 26, 2008

Carnegie: “China’s economic size will match America’s by 2035 and double it by midcentury.”

The Carnegie Endowment for International Peace published a paper “China’s Economic Rise – Fact or Fiction” by it Senior Associate Albert Keidel. It forecasts:

The world will be a very different place by midcentury. In terms of commercial exchange rate conversions to dollars, China’s total economy will be twice as large as America’s, while its standard of living will be higher than America’s is today though only two-thirds of America’s at that time.

And further:

A Chinese economy more than double the size of America’s will almost certainly give China global commercial and institutional leadership. In commerce, China will take the lead in shaping trade and investment patterns. Fluctuations in its domestic demand will send ripples around the world, including in the United States. Market surveys will focus on China first. Its monetary policies will affect liquidity and interest rates everywhere. Its securities markets will be the world’s largest and will heavily influence global standards for due diligence. Finally, its commercial and fiscal largesse will give it entrée to national capitals in all hemispheres. Thus, China’s financial clout will spill into every conceivable dimension of international relations.

Leadership of international institutions will gravitate toward China. This movement could include the equivalents at that time of the United Nations, the World Bank, the International Monetary Fund, regional international development banks, and more specialized bodies. Various headquarters could shift to Beijing and Shanghai. The United States will have an important secondary influence, like Europe, but it will need to compromise, and its sphere for unilateral action will be increasingly curtailed.

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