There is so much talk about how China's rise. How it reflects the loss of empire on the part of the U.S. This may be to a degree true, and it has as much to do with how poorly the U.S. has managed it's house as it does with the ascendancy of China, but if there is angst associated with this we should temper it.
Not only is loss of empire not the end of the world, nor does it even have to reflect a loss of standards of living. The best example of this is the U.K. which lost a huge empire and the ability to mint the worlds reserve currency but saw its standards of living maintained just fine, and up until the recent liquidity crisis had the unabashed strongest currency in the world. But this is a side point...
China's economic rise has been historic. It was ignited by the opening of it's markets and the heavy draw of the consumption potential of it's population. Companies in developed economies wet themselves at the thought of being able to sell to just a fraction of the Chinese population. It is now the anchor of emerging markets from Asia to South America and Africa, investing heavily in relationships to assure its long term economic strength.
But take a deep breath, there is some talk today of how China is in the midst of it's own housing bubble, how its aging population will soon create a drag on its productivity, how inflation is a threat, and how much of its current growth is fueled by public spending. Also from a practical view it is hard to imagine such a rise not being at some point bedeviled by the same kinds of crisis that have threatened economies throughout history. These may prove to be problems or they may be steered around, but a bigger issue lays in China's path. This is that although its rise has been historic there is no way that the world can accomadate the kind of rise in standards of living that it is seeting up expectations for.
Right now China has both one of the worst wealth disparities in the world, and also a very low per capita income. The wealth creates the sense that that people will be pulled into this rise in economic fortunes, unfortunately there isn't enough stuff out there to accomadate that. Now they do have the benefit of starting from such a low rung on the ladder, so for many people owning two televisions is a great improvement, a simple thing to accomplish as far as the resources of the world are concerned, but when we start talking about cars it becomes a much different story. Just before the bubble burst a bit ago commodities were going through the roof because of demand, this was with much of China's population living in poor conditions, now were are to expect that the world can cough up so much more.
O.k. I will grant you that being a citizen of the U.S. this makes it sound like we have ours, but there is no way you can. Let me be in line to say that the U.S. lives way beyond it's means, and its standards of living actually should fall. But this wont be enough to create that much room at the table. Oh and we never even mentioned India!
So what I worry about is that the expectations are being set too high and this will ead to civil unrest. Or if not unrest the desire to follow a nationalistic leader to claims to be able to make the promises come true, no matter the cost. I would like to see the Chinese people find an improved and sustainable standard of living. But that isn't going to be based on current western standards. China alone is about 4 times the size of the U.S., so anyone who thinks there are enough resources out there to have another 4 U.S.s sucking up the stuff from the world is smoking something, and I want some because it must be good.