As you may have noted in my previous demographics posts, I was tracking the population of the various nations I was looking at, both in 1950, currently and the estimated for 2050. Let me summarize briefly what we are looking at (measured in millions of people):
                                      1950                   2017                   2050
China                               583 (1953)        1,411               1,360
India                                 361 (1951)         1,324                1,700
United States                 151                      309 (2018)          402
Soviet Union/Russia       182 (1951)           143  (2018)        132
Japan                                83                        127                     109
Germany                          69                         83                      79
Now, a lot of numbers there. Let us set the U.S. at a value of 1 and everyone else at a value relative to it. So:
                                      1950                    2017                   2050
China                               3.86                     4.57                     3.38
India                                 2.39                     4.28                     4.23
United States                 1.00                    1.00                     1.00
Soviet Union/Russia       1.21                      .46                       .33
Japan                                .55                       .41                       .27
Germany                           .46                        .27                       .20
So, during the height of the bad old days (1950s), the Soviet Union had more population that the U.S.; and China, part of the communist bloc and actually in a hot war with us, had four times the population. Now….well the Soviet Union is gone. In 2050, China will only have three times the U.S. population while a number of major powers (like Japan, Germany and Russia) will be a smaller fraction of the U.S. population.
Again, I note that some people like to talk about America in decline on the world stage. I really don’t see it economically or demographically.
Of course, the real challenge would be predict GDPs in 2050. Probably can with the U.S. On the other hand, it is pretty hard to say where the Chinese economy will be in 2050. I would be hesitant to do a straight line estimate.
For an economic estimate out to 2050 I think EABER WORKING PAPER SERIES Paper No. 119 UNDERSTANDING AND APPLYING LONG-TERM GDP
PROJECTIONS
Did a good job of estimating. Of course doesn’t mean they’ll be 100% accurate but I’ve seen many estimates and theirs I thought was more level headed than most.
Thanks. I will have to take a look at it. Of course, there are some problems predicting Chinese long-term GDP because:
1. It is a communist dictatorship running a capitalist economy. This has never been tried before. Can these two opposing ideologies be merged into something that can sustain economic growth. We don’t know.
2. Part of China’s growth was due to an underdeveloped economy developing. As the Chinese economy continues to develop, does its rate of growth slow (this does seem to be the case).
3. There is some question as to whether China is in a economic bubble. The Japanese economy closed to within 70% of the U.S. economy by 1995 before they collapsed and shrunk and stagnated. They are now at 25% of the U.S. economy.
4. Related to the above point, what happens as countries like India, with lower labor rates, continue to expand their manufacturing. Will they take some of their business, much like China took some of Japan’s business.
5. There is the problem of the negative pull of declining population on the Chinese economy. This tends to produce a huge two-fold burden, where not only do you have a shortage of laborers, but you have an aging less-productive population that needs to be taken care of. It is a factor in the Japanese decline.
6. There may be political instability in China. There was in 1989. Can one maintain tight political control forever over the top of a free market economy?
7. There may be secessionist movements (Uigers and Tibet).
8. Finally, China may break up. China has spent around half its history not unified in a single state. This was the case from 1916-1949. We have only had a unified China for 68 years. Will they still be unified 33 years from now. The U.S. only lasted 80 years before it split into two and fought a four year civil war.
It doesn’t answer all those questions but I think it does deal with most, what I like about that report is that it boils things down to the real basics. It takes the demographic projections, which out to 2050 are really quite accurate short of doomsday arriving. Then it looks at productivity growth rates and that’s it. Which is true, if you have people’s productivity * the No. of people that’s your economic output. Also as they take long run averages they smooth over any kinds of recession, as just lowering the average.
For USA and China they basically project that USA growth rates will be just under 2% on average out to 2050. For China they see it declining in its growth rate from about 6.8% on average this decade down to about 1.7% per annum in 2041-2050 (lower than the USA by then).
It does focus more on PPP rather than market exchange rates so it’s more focused on people’s cost of living that geopolitics. But it does forecast the per capita PPP will be about half the USA level in China by 2050. Given that China will have almost 4 times the population this does mean the China will have almost double the USA’s PPP GDP.
Thanks. Interesting.