Is it Inevitable that China will surpass the US as a world power?

It’s helpful to think of the economy as a car.

To manufacture a car we need raw materials and intelligence.

Raw materials flow to the nations with the most intelligence.

The reason it's accepted wisdom China will surpass the United States is because they have a much larger population that is slowly but surely becoming more educated.

For demonstrative purposes, let’s say humans have 1 - 3 intelligence points...

1 point = illiterate.
2 points = literate.
3 points = tech-literate.

Not all humans are equal in capitalism.

Country A has 100 people, but they only have 125 points because 90% of their people are at level-1.

Country B has 50 people, but they have 150 points because 100% of their people are at level-3.

Therefore applying this logic to reality, the assumption for why China will surpass the US is because their humans are becoming more educated FASTER than the US is growing in population size.

And based on the current trend, many economists expect China will surpass the US as the world’s largest economy sometime between 2030 to 2040.

It could happen.

But this assumption underestimates the rise of machines.

Whereas a human can attain 3 intelligence points… a machine can equal an infinite amount of intelligence points.

(most powerful country in the world 2020, china vs us economy comparison)

Power flows to the nation with the most intelligence.

What the US lacks in population size and human intelligence points we can make up for in machine intelligence.

To bring this answer back to the car factory metaphor…

If it takes 100 humans to make a car, but then we have machines automate away 90 of those humans… the factory is still producing the output of those 90 humans.

Those 90 people are then freed up to do something else and so the US would have effectively added 90 people to its population size.

(most powerful country in the world 2020, china vs us economy comparison)

It then becomes in the United States national self-interest to prevent that machine intelligence from leaving as it would serve as the backbone of our economy, especially if it were to leave for a competitor nation like China.

The U.S. can prevent its intelligence from leaving by raising tariffs and doubling-down on intellectual property theft.

China’s economy may surpass the US briefly, but expect to see the US start to reign in their intellectual property more and more as China becomes a greater threat.

In addition, China’s economy has been losing growth momentum since its peak at 14% in 2007 with 11% in 2010, 7% in 2014, and 6% in 2018.

Machine intelligence is also not as easy to move or steal as you might think because a high-tech car factory requires a whole host of complex integrated technology with skilled technicians at the controls.

China and other countries will send spies into those factories in order to steal/learn how they can copy their technology so they can bring it back to their home countries, but it will be harder to steal (better surveillance) and harder to copy (more complex systems) than it was in the past.

The tiger may rise, but an eagle rises faster.

(most powerful country in the world 2020, china vs us economy comparison)