From Overseas Press

4 reasons to cheer when China overtakes America

(chinadaily.com.cn)
Updated: 2011-05-04 09:38

The International Monetary Fund (IMF) predicted that China will surpass the US and become the world's largest economy in 2016. However, some believe that it may turn out to be a blessing for the US, according to Rick Newman in US News & World Report on April 28.

Newman, the magazine's chief business correspondent, listed four reasons:

First, the US needs an "underdog mentality." Being No 2 may not be a bad thing for America, which "would generate a common sense of purpose and give Americans something to rally around," and it "might help generate the kind of determination to solve problems that no blue-ribbon commission or bipartisan study group can generate," said the article.

Second, a quick descent for the US would be better than a slow decline. Newman pointed out that the US stopped being No.1 in many aspects such as poverty rate, education scores, prosperity index and healthcare. But until the US economy is no longer the world's biggest, "we're likely to fool ourselves into the thinking that if it's the world biggest economy, it must be healthy enough."

Third, it might force the US to take actions on economic priorities. Falling to No.2 would be "the kind of impossible-to-ignore setback that it takes to get politicians' attention." Some analysts believe "it will take a genuine crisis to force politicians to make the deeply unpopular moves--including spending cuts in cherished programs and higher taxes on most voters--that it's going to take to solve this national problem," said the article.

Last, small economies can be prosperous, too. According to the Legatum Institute's prosperity index, Norway, Denmark, and Finland rank at the top, followed by a bunch of other countries with far smaller economies than the United States. With most of them spending relatively little on defense, they seem quite comfortable to let others set global policies while they simply stay home and enjoy high standards of living, "which is where the United States has fallen out of sync."