By Henry Blodget
The premier of China, Wen Jiabao, has published a startling editorial in the Financial Times in which he basically gloats about China's perfect economy and China's government's perfect handling of it.
This comes in stark contrast to Fed Chairman Ben Bernanke's press conference two days ago, in which is said he didn't know why, despite the U.S.'s enormous stimulus efforts, the U.S. economy remains so weak.
Bernanke's uncertainty was likely willful blindness or obfuscation: In the aftermath of a debt-binge like the one that fueled the last three decades of US growth, economies generally recover very slowly. And the U.S. economy has barely begun to work off the massive debt load that we've piled up.
So the US had better get used to being lectured about China's superiority.
There are plenty of reasons to think that China's economy will eventually stumble and crash, the way all economies do. The country is spending untold trillions building internal infrastructure, and the frequent stories of "ghost cities" and other unneeded projects leads many to believe that the country's growth is an illusion.
But regardless of whether (or when) China's economy stumbles temporarily, the country's long-term rise seems inexorable. Basically, China seems to be in a similar position to where the US was more than a century ago: An emerging powerhouse that will eventually blow past the rest of the world and become the globe's dominant economic and military power.
The US, meanwhile, will have to work hard to regain the fiscal fitness and discipline that we lost during the boom years, especially in the decade leading up to the housing collapse. The country will remain a superpower, and the outlook is by no means disastrous. But we have a lot of hard work to do.
See Also: Amazing Satellite Pictures Of China's Ghost Cities
- Wen Jiabao
- Henry Blodget