China surpasses Japan as 2nd largest economy
Joseph Starkloff
China has recently surpassed Japan as the second largest economy. Japan is still richer per person, but China’s rise has caused concern for some economists.John Filer, an ASU economics professor, discussed his concerns about the economic pathways taken by the US, the world’s richest economy, in relation to China. He stated that there is a realistic possibility for China to eclipse the US.
“Can (China) catch us? Yeah, if we keep doing the stupid things we’re doing, and they keep doing the things they’re doing,” Filer said.
One reason he mentioned for his concern was the current government spending in the US.
“I don’t get any more from the government than I did when I was 20-years-old, and I’m 66. When I was 20-years-old I got highways. I still get highways but they have potholes in them,” Filer said.
He also scrutinized the current status of the public education system, and stated that it is an example of government spending no longer being as proficient as it was in the past.
“When I was 20-years-old I got a public education. It was a good (education), and I’m a professor now. I would never dream of sending my kid to a public school now, because you don’t get your money’s worth,” Filer said.
One of his biggest concerns was with what he stated as an over taxation of business.
“We have the highest business tax rates in the world today. If I was going to start a business and had a lot of money . I wouldn’t start it in the United States. I’d take it to China and start it. Why start it here? The government is going to take it all,” Filer said.
In the past, China stuck closer to its communistic government and ideals. Filer stated that this has changed over the last several decades, and they have started to emulate, in certain polices and behavior, the US during the early 1900s.
The economic transformation in China has allowed them to grow substantially, and tap into capital they didn’t posses previously.
“The more capital you have, combined with your land and labor, the more you’re going to be able to produce. China always had a lot of land, and always had a lot of labor . but they never had a lot of capital. Once they freed up their markets . entrepreneurs started to flock to China,” Filer said.
He stated historically the US was much more dominate than other nations was due to its superior amount of capital, but things have changed over time.
“They have a lot more resources than we do. Resources are land, labor and capital. The only reason we’ve ever destroyed, figuratively speaking, India and China, when it comes to economics is because we’ve had so much more capital than they do,” Filer said.
