What happened to the China GDP talk of 6-8 years ago?

[politicallefty]

Obviously overblown BS.  Just like Japan in the 90s.  Fearmongering sells.

I don't think Japan was overblown or fearmongering. Japan's growth in the late 80s was explosive and wasn't starting too far back from the US like China. If they'd kept pace in early 90s, they probably would have surpassed the US. Even if the Lost Decade had not happened or been delayed several years, would the implications have really been that serious for US? There's probably a difference when your main economic competition isn't an adversary. Either way, the US economy was due for the Dot-Com Boom in the late 90s.

I don't really know much about the intricacies of the Chinese economy, but even now, China's GDP is at 60% of US GDP. In 1995, the Japan's GDP managed to hit about 70% of US GDP. Looking as far back as 1970, that was the closest any other country has been to the US. Prior to Japan becoming the world's second largest economy (surpassing the Soviet Union in 1977-78), no country was even at half of US GDP.

[politicallefty]

Except that it's virtually impossible for any country to "keep pace" at that level unless they want to keep the printing presses running 24/7.

At a basic level, there are three ways a country can increase its total output (i.e. its GDP):
1. Population growth (leading to more people producing things)
2. Substituting work for leisure (people producing more because they work more)
3. Productivity growth (people producing more without working more)

Japan can't do the first one because its population was stagnating for years and is now starting to decline outright.

It has been doing the second one with ferocious intensity for decades and that was a big contributor to their phenomenal growth in the '80s. When more of your people are getting old and no longer working, the people who are still of working age have to work more in order to make up for that. Hence, the archetypal overworked salaryman and the glorification of employees passed out at their desks from working all night.

Productivity growth has been slowing in the US since the 1970s (there was a small bump in the '90s related to the advent of personal computing in offices). I'd imagine the story has been similar in Japan.

I'll admit right now that this isn't my strong subject. I'm just looking at the facts and what I already know. I think Japan's growth in the late 80s is one the most impressive in modern history. They increased their GDP by over 50% from 1985 to 1986 and put extremely strong numbers the next two years. Then, the numbers flatlined for a couple years before booming again and peaking in 1995. Like I said, it was very possible for Japan to have surpassed the US, albeit briefly.

I've always been impressed with Japan's economy in relative terms. It was the second largest economy, only to the US, for over 30 years. I agree with you on your list of three. Japan does the second exceedingly well. If they can work on the third, they should probably start growing at a robust pace. I think Japan's main inhibitor of growth is the first. Yeah, the Japanese do live longer than most other First Worlders, but their birth rate and immigration laws are horrendous for future population growth. I don't think they can really increase the birth rate. Ultimately, if Japan wants to really grow its economy, it will have to completely change its immigration policy.  As much as I love Japan, I'm not a fan of its strict immigration policies. I think Japan's only hope to remain a major world economy is to open its doors. If it doesn't, it will keep getting smaller and older and basically not even a hollow shell of what it is even now.

I'm not worried about China because I think its economic growth is from brute government force. I don't think the fundamentals are there. I think China's far more likely to experience a serious implosion than to get anywhere near the US in terms of GDP. China still does not have what we in the First World would call a true middle class.