Europe will be the first to drop out of the game of kick the can: Expect a disorderly debt default in Greece, more trouble for European banks and a sharp recession across the continent.
In China, the need for economic reform also has become obvious. It has been four years since Premier Wen Jiabao first warned that the country’s economic model is ‘unstable, unbalanced, uncoordinated and ultimately unsustainable’ and three years since the financial crisis made clear that China’s growth remains dangerously dependent on exports to Europe, America and Japan.
China has the cash and foreign reserves to postpone a crisis. But growth is slowing, financial stresses are rising, and there is good reason to fear that China’s days of can-kicking are numbered as well.
But the longer-term future appears much brighter for the U.S. than for either Europe or China. America is still the leader in the kind of cutting-edge technology that expands a nation’s long-term economic potential, from renewable energy and medical devices to nanotechnology and cloud computing. Over time, these advantages will yield more robust economic growth.
Despite debate over illegal immigration, the U.S. population will likely rise from 310 million to about 420 million by midcentury. Between 2000 and 2050, according to Mark Schill of Praxis Strategy Group, the U.S. workforce is expected to grow by 37%. China’s will shrink by 10%. Europe’s will contract by 21%.
Good points that I agree. EU has more troubles than China and US. China is like a moving train: it has to depend on speed to keep it altogether. Once it slows down troubles will spell out.