Monday, January 02, 2006

Chinese Economy Growing but Not Menacing

Happy New Year everyone, I'm back from my holiday break and writing again.

Bloomburg's John Berry writes that China's economy is nowhere near matching the US's and that China's main presumed strength, its population, will become a shrinking factor in years to come.

Partly as the result of continued immigration, legal and illegal, U.S. population is increasing by 0.92 percent a year... With no net immigration and with its government's harsh rule of one child per family, China's population is expanding at a much smaller 0.58 percent rate. Surprisingly, given the enormous difference in current populations, Census Bureau projections show that between now and 2050, the U.S. population will rise by 124 million while the Chinese population will increase slightly less, by only 118 million. If those projections prove accurate, the Chinese likely would have no great advantage in terms of a burgeoning labor force as an ingredient for economic growth.

These observations are in the same vein as those from a previous post.

If we allow ourselves to be overcome with fear of foreign competition, we could be tempted to enact protectionist legislation that is harmful to both the US and Chinese economies in the long run.


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