Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

How China will Overtake the World –Robin Trehan

There are various reasons why many believe that China will overtake the U.S. and the rest of the world within the next 10 years or so. Over these past couple of decades, China has risen extensively economically. Their GDP has grown 7 to 10 percent since the 80s and there doesn’t seem to be an end in sight. The question doesn’t really seem to be whether China will overtake the U.S., but it’s a question of when. Right now, the U.S. is the world power because everything (meaning oil) is traded in American dollars. The reason why it’s in the dollar currency is because majority of the oil companies are owned by the U.S. and we are the largest consumers, producers and exporters of oil. Now, this could soon all change -- some are speculating that the oil will soon be traded in the Chinese renminbi.

 

China is steadily on the rise as the U.S. is facing one of the worst recessions in its history. Even Robert Zoellick, the president of the world bank, said that the current financial crisis may show that there is a change taking place in economic power relations. This concept is also probably weighing in the minds of various Western policy-makers. Apparently, the recession of the Americans has helped to accelerate the economic growth of China. Word has it that China will continue to grow at a rate over 10 percent during the next decade and America at less than 2 percent. It only makes sense that China will become the world’s largest economy and creditor nation. This position was once that of America in the 1950s. It is also predicted that China will become the largest consumer of oil, which would help to push oil and other commodities into a “bucket” of currencies.

 

The distressed real estate market in the U.S. and the rest of the world is catching the eye of China. They are planning to buy a billions of dollars worth of real estate from the U.S. and in countries within the Middle East and Europe. Being able to purchase real estate well below value will allow lots of money to be made some years from now when the real estate market rises again. Owning that much property in leading countries will put China’s hands in a little bit of everything. Maybe if the U.S. stopped debt spending and learned that a penny saved is a penny earned, we wouldn’t owe as much money and would be able to get out of the situation that we’re in. China has been patient and as the fortune cookie says, “good things come to those who wait”.

 

Robin Trehan is management and financial expert. More information on him can be found at www.creditcapitalfunding.com www.businesscreditfunding.com