Why China? Who is Next?

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Dec 13, 2023, PRINCETON

Recently, in preparation for my AP exams, I completed a systematic study of both macroeconomics and microeconomics. I chose to use Professor Gregory Mankiw’s textbooks, “Principles of Microeconomics” and “Principles of Macroeconomics.” My father graduated with a degree in economics, so I’ve been able to engage in relatively specialized economic discussions with him. One particularly interesting topic we explored is why, over the past 30 years, China—despite its initial economic challenges—has developed into a powerful economic force after the United States and Japan. Additionally, we pondered which country might follow a similar trajectory next.

To address this question, I delved into extensive research and organized my thoughts into this article. While many viewpoints are still evolving, and some may even be incorrect, I welcome any feedback or corrections from readers.

After my study, I think over the past three decades, China has found itself on the express lane of history, benefiting from several crucial conditions that coincided as below.

However, examining the present reveals changes in these five conditions over the last decade:

In summary, the five conditions that drove China’s remarkable transformation are now shifting. Looking globally, only three countries—the United States, Japan, and South Korea—have harnessed such opportunities for rapid development in modern history. Each had unique circumstances, but timing, unity, and favorable conditions were common threads.

Let's look at Japan. Japan has indeed experienced two revivals: the Meiji Restoration and the post-World War II resurgence. Let’s focus specifically on the post-World War II revival. After World War II, Japan was utterly devastated, and its domestic economy was on the brink of collapse. However, it was fortunate to have five conditions that contributed to its revival:

After China, who will be the next? Looking ahead, the most likely contenders for the fourth position are India and Vietnam. India, in particular, possesses the necessary conditions in terms of population, market, international relations, capital, and technology, although uncertainties remain regarding spiritual and domestic political factors.