In the 1980s, a lot of people wrote books and articles about how Japan was going to be the world’s leading country. The most famous of these was Ezra Vogel’s Japan As Number One: Lessons for America. At the same time, in 1989, Bill Emmott wrote a book called The Sun Also Sets: The Limits to Japan’s Economic Power, in which he predicted that Japan would revert to the mean. History has judged Emmott the winner of this contest of ideas. He didn’t get everything right — his characterization of Japan as an export-led growth model didn’t fit the facts, for instance — but in general, he got more right than wrong. His analysis of Japan’s financial weakness, aging challenges, and low service-sector productivity were right on the money.
At the time, though, with Japan at its zenith, it was easy to make Vogel-like predictions of continued domination, and it was out of vogue to be a contrarian like Emmott. The same is true of China today. Over the past few years, skepticism of China’s rise has mostly evaporated in the West, and most Americans now believe that China has either overtaken their country or will do so in the near future:
There are still a few hawkish types out there writing articles about China’s coming collapse, but almost no one is paying attention. All the attention is on Chinese cars, Chinese cities, Chinese trade surpluses — or on America’s flailing in the Middle East, its chaotic policymaking, its divided society, and its inability to manufacture anything in volume. Between America’s dysfunction and China’s technological achievements, the idea of a Chinese Century has become conventional wisdom.
In a post last year, I assessed that this conventional wisdom was probably right — that the 21st century would be a Chinese century, although China’s dominance wouldn’t be as pronounced or as beneficial to the world as America’s was in the 20th century:
I don’t think I made the same mistake that Ezra Vogel and many others made when assessing Japan in the 1980s — of just assuming that recent trends would continue. China is about 12 times the size of Japan. It can dominate the world, industrially and geopolitically, without ever coming close to the U.S. or even Japan in terms of per capita GDP.
I also hedged my bets a bit. Though I’ve always been highly skeptical of the idea that demographics will sink China (I think they’ll be more of
