Finance, Forex and Investments

Is the growth of Asian economies(China, India) a threat to the US?

I need to analyze the growth of US trade with China and India. Is growth of these and other Asian economies a threat to the US? I'd prefer to hear both sides(pros and cons), if that's possible.

Public Comments

1. No, the lack of growth in the US is a problem for the US! Think about what creates economic growth in the US, and why growth rates have recently not been so favourable. Also, high growth rates in China and India are expected, given that they are middle income economies- they simply grow at a faster rate as they are smaller to begin with. Diminishing returns should then kick in.
2. From an economic standpoint, definitely no. China and India's growth are increasing the demand for U.S. products, creating more jobs for Americans (although I live in Canada, it's the same for Candians as well). It will also increase the average American's standard of living, as China and India will have products and services offered either better or cheaper relative to the U.S. Economics is not a zero-sum game, U.S. does not have to lose if India and China gain. The key to the U.S. remaining competitive is increasing its productivity in the long run.
3. Depends on your energy outlook. From the standpoint of conventional economics, the growth of China and India is not a threat, but an opportunity; to develop, China and India will require lots and lots of capital goods (from power plants to airplanes), in which developed countries have a distinct comparative advantage. At the same time, it is possible that continuing growth in China and India will put upward pressures on energy prices and increase emissions of greenhouse gases (even now, China's carbon dioxide emissions are second only to U.S.', mostly because of China's reliance on coal), so in this regard, growth in Asia can be a threat, but not just to the U.S., but rather to the survival of the human race. Indeed, it can be argued that the greatest threat to the survival of the human race actually comes from the U.S. and its unwillingness to do something about its greenhouse gas emissions...