Elon Musk says Chinese economy will surpass US by 2 or 3 times: The foundation of war is economics

  • Elon Musk predicted that the Chinese economy will surpass the United States’ at least two-fold.
  • The two nations already are the world’s two largest economies, although the U.S. economy is currently larger.
  • China overtaking the American economy would likely cause increased tension between the two countries, which are already at odds on issues such as trade and 5G technology.

ORLANDO, Fla. — Tesla and SpaceX CEO Elon Musk predicted Friday that the Chinese economy will eventually surpass the United States’ by at least two-fold – which would up the ante between the nations’ massive militaries.

“A thing that will feel pretty strange is that the Chinese economy is probably going to be at least twice as big as the United States’ economy, maybe three times,” Musk said during a fireside chat with U.S. Air Force Lt. Gen. John Thompson at the Air Warfare Symposium in Orlando, Florida.

“The foundation of war is economics,” Musk said. “If you have half the resources of the counterparty then you better be real innovative, if you’re not innovative, you’re going to lose.”

The two nations already are the world’s two largest economies. The U.S. dominates with $21.44 trillion in nominal GDP and makes up one-fourth of the world economy. China, however, is the fastest-growing trillion-dollar economy with GDP of $14.14 trillion, according to the Nasdaq.

Because China’s population is about four times larger than the United States, Musk said it would lower the barrier for China to surpass in economic size. The United States has roughly 330 million people, according to the U.S. Census, while China has more than 1.3 billion people.

“It would only require getting to a GDP per capita half the size the United States for their economy to be twice the size of ours,” Musk said.

China overtaking the American economy would likely cause increased tension between the two countries, which are already at odds on issues such as trade and 5G technology.

Throughout his conversation with Thompson, Musk repeatedly stressed the importance of innovation in the United States in order to maintain its competitive edge. When it comes to space, Musk said that the U.S. is at risk of falling behind.

“This is not something that was a risk in times past but is a risk now,” he said. “I have zero doubt that if the United States doesn’t seek innovation in space it will be second in space.” CNBC reported last week that SpaceX is seeking to raise about $250 million at a $36 billion valuation.

In order to encourage innovation, Musk called for more industry competition and specifically called out the Pentagon’s most expensive weapons system.

“The Joint Strike Fighter, there should be a competitor … that’s a controversial subject but I don’t think it’s good to have one provider,” he said, referring to Lockheed Martin’s F-35 program.

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Amanda Macias reported from Orlando, Fla., while Jessica Bursztynsky reported from Englewood Cliffs, N.J.

Source: https://www.cnbc.com/2020/02/28/musk-says-chinese-economy-will-surpass-the-us-by-two-or-three-times.html

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