China is still a poor
country. Notwithstanding the complexities of measurement, income per head,
according to the World Bank, is roughly $3,000, a little less than Jordan and
In the extreme scenario
in which US income per head remains the same forever more, and China’s
income per head grows by a constant 8 per cent a year, convergence would happen
in 2045. But this is silly maths.
The US will not stand
still and China’s economic path is likely to be punctured sooner or later
by a credit or asset crisis.
Further, it cannot grow
by 8 per cent a year for that much longer, not least for demographic reasons.
China is the fastest-ageing nation on Earth, with an age structure rather like
that of Germany.
Its labour force will
begin to decline in 2010 or so and fall every year for the foreseeable future.
For a while, the transfer of the 80 million rural migrant pool to
higher-productivity urban jobs will mask much of this impact, but only for a
By 2040-50, China will
have more people aged over 65 than the entire predicted population of the US.
In fact, on every demographic measure, China will be worse off than the US by
the middle of the decade.