1) In 2020 median age in China is 38,4 while USA's median age is 38,3---and China is aging very rapidly due to one child policy....in the near future average Chinese will be several years older than average American with all the consequences it will have for economy, (especially for Chinese desire to swith to economy based on consumption)
2) Total corporate/household/government debt in China is 320% of GDP and is growing very rapidly...Corporate debt alone is 190% of GDP...This is very high for a country at this level of economic development and increases the risk of financial crises similar to Japan in 1990s
3) Chinese Navy's power projection capabilities will be comparable to USA's only in 2040 or later
4) entire Chinese trade---its exports.... and its imports of food/oil/raw materials pass through the oceans controlled by the US Navy and this will not change until 2040.
(for example if USA decides to start a war with Iran in the Persian Gulf, oil supplies to China will stall and this will generate a massive economic shock to highly indebted Chinese economy...and CHina can do nothing about it due to power projection limits of PLA......at the same time USA has its own shale oil production and can be nearly immune to oil crisis in the Persian Gulf)
In general Chinese economic model is a copy of Japanese economic model.
Do you remember what happened with Japan?
In 1980 there was a Japanophobia in USA with concerns that Japan is going to overtake USA as a next superpower
At first Japan was growing 10% a year from 1950 until 1987 and then suddenly Japanese economic growth slowed to 1% a year from 1990 until 2020.
Japanese had high saving rates and this generated high level of investments and high rates of GDP growth.
There are three types of economic growth: 1)export driven growth 2)investment driven growth 3)consumption driven growth
When Japan exhausted all three types of growth models--- its economy stalled.
China is the same as Japan: high rate of savings generate high rates of investment and high rates of GDP growth
1) First Chinese economy grows through boosting exports (1984-2008)----in 2008 this model exhausted itself
2) Then China grows through boosting investments----it tells the local governments to borrow money from banks and build infrastructure and tells state owned companies to borrow money from banks and build new factories even if they are not very profitable----but as corporate debt is 190% of GDP (the highest in the world) and total debt is 320% of GDP-----investment driven growth is no longer possible
3) There is a hope to switch to economy based on consumption----but consumption is mainly made by younger generations---as China is aging rapidly---consumption driven growth is impossible
So probably Chinese economy will stall this decade like Japanese economy did in 1990, because all three types of growth (export driven/investment driven/consumption driven) is coming to their limits in China
