No. Rather than looking at emerging markets like the BRIC (Brazil, Russia, India, and China), we should be looking at the mineral and energy commodity producers: Brazil, Russia, Australia, and Canada.
The BRAC countries have done a better job than India and China (and the USA at keeping their populations down while growing their domestic economies and exports of minerals.
They will continue to do well in the future, and the USA will recover fully before China and India.
It appears that as America embraces socialism and “success by government” as its path to the future, China and India are increasingly embracing capitalism.
With our dependence on China for financing, the fact is that to some extent, china controls our future. (like the sign I keep in my office as a reminder: “when you are dependent on someone else for your daily needs, you better hope to keep them happy).
As china invests in and grows its own economy, there may come a time they don’t need Americans to buy their products, in which case, they won’t need to keep buying our government bonds. I personally expect them to stop buying government debt, and start investing in corporations, particularly if congress and obama keep pushing the “punish corporate america” policies. Who knows, maybe corporations might decide a capitalist China might not be a bad place for corporate headquarters.
There’s a great book “wealth and democracy”. (reference page 175 – showing flow of capital and skilled labor from Spain to Holland to England to America. In each case, government got too taxing …. could a flow of same from America to China, India, Brazil, or a combination be next?
Quite possibly. yes. But even more interesting are the macro-economic trade winds for the future. China is now finally stimulating domestic (Chinese) consumer growth. If that catches on, and continues (rather than reverting to a high savings rate) then their over 1 billion population could push them to #1 economy status. This is still years away, but not impossible in the future.
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No.