19C Germany as a bad analogy

I’ve uploaded a page that compares today’s GDP dynamics in Asia and 19th century Europe. You continuously hear China’s rise compared to that of Germany (e.g., Heginbotham indicates the view is prevalent in policy circles).  What I took from these analyses is three things:

1. The changes in economic power in Asia are way more dramatic and way faster than Europe. The usual analogy is deeply flawed. In fact, the changes in economic weight in Europe were very small. So GDP is not destiny by any stretch.

2. All else being equal, though, the equivalent of the German-Austrian alliance, which entangled Germany, probably will be neither necessary nor very useful to China.

3. In relative economic terms, China’s rise in fact much more closely resembles that of the US than Germany, just faster.

Of course, this is all predicated on China not collapsing, but there’s some of that below, and the subject of a post tomorrow.


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