Friday, March 15, 2013

China and the U.S. Continued

A while back I had a post illustrating the difference between savings rates in the United States and China. Recall that China saves upward of 50% of its gross domestic income while the United States saves about 12%. Recently, I found a fascinating chart illustrating the difference between the capital stocks in both countries, and the results surprised me. I had no idea that China was so capital deficient, even in 2010. Also, I had no idea the USA was so capital rich even compared to countries like Japan.

This serves to illustrate how very different the US and China remain, with the former holding an incomparable advantage in wealth and prosperity. It also serves to demonstrate the wrong- headedness of those who say China is saving and investing too much and needs to shift its economic emphasis to consumption.

No comments:

Post a Comment