(James Saft is a Reuters columnist. The opinions expressed are his own)
By James Saft
(Reuters) – Asia’s economic miracle may be waning just as the foundations for an eventual resurgence in the U.S. are being laid.
Asia, China in particular, may be bumping up against the limits of a capital-intensive growth model predicated on cheap labor. To counteract this, countries like China may have to adapt legal, political and even academic practices which could up-end existing power relationships.
At the same time, technology, geology and new manufacturing techniques may in combination give U.S. growth an energy and innovation boost.
“To pose the question about the Asian miracle is not to doubt China’s and Asia’s economic potential and significance, but to throw down the gauntlet to the conventional thinking that extrapolates Asia’s past economic performance into the indefinite future, and assumes that the competitive challenge from the U.S. and other Western countries and companies is now a spent force,” George Magnus, an economic consultant to UBS writes Monday in a note to clients titled “Asia: is the miracle over?”
To be sure, Asian growth rates won’t dip below those of the U.S., other than under the most extraordinary scenarios. There is, however, real potential for rates in China, India and elsewhere to disappoint the sorts of forecasts now common, and for the U.S. to stage a meaningful, and surprising, rally.