The Atlantic’s Ruchir Sharma writes: “…. Since the crisis of
2008, most Americans have come to expect gloom rather than gold in the near
future. The long-term US growth rate is now burdened by our huge debts, and is
slowing to 2.5 percent, down from 3.4 percent between 1950 and 2007. This fall
is stoking a premature sense that American preeminence is already over. Polls
show that a majority of Americans think China is already the world's
"leading" economy, even though it is still about one third the size
of the U.S. economy. The reality is that, at 2.5 percent growth, the US remains
the fastest-growing rich economy, and is in fact regaining some of the recent
ground lost to newcomers like China..
America's performance should be measured against the current
competition, not against the records it set in the 1990s or 2000s. All the big
emerging markets are slowing, most notably China, which has lowered its growth
target to under 8 percent for the first time in many years and may well fall
under 7 percent. It is hard to grow at a sprinter's pace when you are hitting
middle age, growing careful and a bit fat. China is all three, having recently
reached an average real income of more than $5,000, with a total GDP of more
than $7 trillion, and a new taste for welfare state programs. Every
"miracle economy," from Japan in the 1970s to South Korea in the
1990s, slowed at this real income level.
Unhappily, for those who like to imagine that globalization
can produce "win-win" finishes, China's slowdown will be America's
gain. The story of American growth slipping by a point will pale in comparison
to the three or even four point slip in China. If the U.S. grows 2.5 percent
this year, and China slips to 7 percent, the United States should regain the
title it lost to China in 2007: that of the single largest contributor to
global growth…..
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