China continues to grow its economy at around a 6% annual pace. China is the second-largest economy in the world in terms of total gross domestic product (GDP); however, on a GDP per capita basis, the nation remains a fraction of the size of the United States. While this is a fact, China continues to make a run at being the big dog on the block.
At TrueStar Advisors, we are forecasting continued growth in the 5 to 7 percent rage for the near-term future of five to seven years. With that said, we forecast the growth to be different from the prior decades; as it should be. China invested heavily in its domestic infrastructures such as dams, roads, airports, rail systems, and cities. Thinking forward, we believe the government will focus on lifestyle issues and the standard of living for its 1.4 billion people. For those following China, one must never forget to consider a large number of citizens living in rural poverty. For those in urban areas, lengthening life expectancy and reducing health care costs by cleaning the air initiatives is critical. Pollution has unquestionably affected China as a result of rapid industrialization. The result is widespread environmental and health issues which are compounded by an aging population. China’s average age is now equivalent to the U.S. and within 10 years of Japan. The long-term impact of China’s one-child policy through the abortion of female fetuses and infanticide continues to be a humanitarian issue ignored by the influential U.S. manufactures, such as those based in Silicon Valley. Infanticide is the unlawful killing of very young children. For those in northern China, air pollution from the burning of fossil fuels, principally coal, is causing residents to die on average 5.5 years sooner than they otherwise might according to various global watch groups.
Future growth will favor business and consumer services, as well as financial services and healthcare. This is something we are not losing track of and will continue to forecast on an internal basis. China is on track to overtake the U.S. in terms of the overall size of the economy within the next two decades. It will take more than a generation, though, for China to approach the U.S. in terms of GDP per capita. At the same time, we are keeping a close eye on the emerging nations of Nigeria and India for new infrastructure growth opportunities if for no other reason that the explosive population growth. This growth will favor business and consumer services, as well as financial services and healthcare.
The wildcards continue to be at play, and these cards are potent jokers. It takes only a clown, joker or two in a deck to change the course of history, and rest assured, there are jokers in China, Nigeria, India, and elsewhere that requires heightened awareness.
Now stand up and replay the YouTube video and dance. In the alternative, sit back and think about it while listening to Joe Walsh. sing about the lifestyle that has changed the U.S. There's some deep economic thinking that can be done while listening to Joe if simply Connect Dots.
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