Ben forwarded this from the ever-interesting Niall Ferguson, prophesying an end to the dysfunctional Sino-American relationship of the last two decades. Putting aside the broken-record player nature of this kind of thing, I see two problems with its underlying assumptions, especially the happy-talk ending it predicts:

First, China’s growth has an upper limit that comes about ten years from now because they’re not making babies like they used to, and everyone’s getting older. This is set in a hypothetical world where China has growth capacity to make up for the loss it will experience in the short term.

Second, following from that, China’s growth model is premised on there being a market outside of China for the sale of everything. In other words, there is no real domestic PRC market. American and other Western companies have longed for the massive Chinese market for two decades, and whaddaya know, they always get their rear ends handed to them, because (1) the market isn’t there and (2) China picks winners (Han) and losers (everyone else). The idea that American companies have any growth future there is a charming fantasy, nothing more.