What happens to the Us economy if china becomes a democracy? The major problem investors have with china is that its basically not a democracy. They just dont trust the country. If china were to become a full fledge democracy, what would happen to the Us economy. Would that finally shift the balance of economic power to china?
It would be a major impulse. Democracy equals increased participation of the chinese population in the creation of wealth. This increase will translate into higher valuations elsewhere in the world, especially the US.
The economic reforms spread from a small part of China to the entire country. 700 million people go from 3rd world to 2nd world standards of living within 10 years. Huge, huge boost to global demand and production, it could single-handedly bail out the impending semi-depression.
democracy would most likely ruin the country, as people use propaganda to easily influence the citizens to vote against their own interests like in America. It would most likely lead to a collapse sometime in the near future.
The major problem investors have with china is that its basically not a democracy. --------------------------- The problem might be the legal system. Even a Democratic system in China might not change the value of money over life. If they can save a dime but risk a life, I think current China will save a dime.