Must listen here.
I obviously side with Clive Hamilton in this debate. For me the key point is that Hugh White is no economist. Indeed, in relying upon Australian Treasury forecasts for Chinese growth ten years hence, he is taking the word of muppets demonstrably unable to get their own economy right, let alone the black box of China.
There are three major points to make:
- first, the Chinese economy is going ex-growth over the next decade as its debt problem stagnates all, meaning its catch-up period of growth ends and so does its military one;
- second, there is a large difference between measuring output as GDP without writing down misallocated capital as China does, and the way that the US does it. Once this difference is included, real Chinese output is already considerably lower that it appears;
- third, China’s demographics are terrible, roughly equivalent to Japan as its decline began, whereas the US has much better and demographics which, as we know, are economic destiny.
In short, if economic power is strategic power then China is currently passing through its zenith not in the foothills of rising Himalayan power, which is not to say that it won’t be powerful, but it is to say that it can be contained.