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China's Future: Ascendency or Fragmentation?

As the American Empire declines, many see the People’s Republic of China, with its dynamic economy and powerful military, surpassing the United States and emerging as the new world power.  The reality is more complex, and China’s future more uncertain.

According to one set of statistics, China has seen impressive economic growth as a result of the reforms instituted since 1978.  She now has the fastest-growing economy in the world, averaging over nine percent per year over the last 20 years, a total-factor productivity growth of four percent per year, the world’s second-largest economy (having surpassed Japan in 2010), the world’s third-largest GDP after Germany and the United States, a trade surplus of $260 billion, and the world’s largest foreign-exchange reserve, estimated at $2.4 trillion.  China now owns an estimated $1.6 trillion in U.S. securities (including more than $800 billion in Treasury bonds), making her the single-largest holder of U.S. public debt.  China’s Shanghai Exchange is the world’s fifth-largest stock exchange; China is the world’s largest exporter, second-largest importer, and third-largest trading nation, after Germany and the United States.  China is the world’s largest energy consumer.  She has become the world’s sixth-largest foreign investor.  In 2008, China invested over $52 billion overseas.

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