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The upward revision of the economy's size means that China's spending on education, health care and other programs is even smaller as a proportion of the economy than previously thought. And industrialization is taking a toll. Several industries, including steel and automobiles, have been growing so rapidly that they now have problems of overcapacity. Still, with 300 million rural laborers in China eager to join the industrialization push, and at wages that are a small fraction of what Americans or West Europeans earn, the downward pressure on jobs and salaries worldwide is likely to continue. Ford's late-January restructuring, involving 30,000 job losses, demonstrates that theme.
Such drastic steps are feeding a backlash against globalization that is of growing concern. "There's a win-win depiction of globalization that the world doesn't buy," Roach said. Added Tyson: "In the U.S., I can find very few groups who deeply understand the economic dependency of the U.S. and China and speak positively about it. They see China more as a power threat than as an effective economic ally, as a threat to American jobs rather than a source of jobs, and as a threat to U.S. financial markets rather than a source of funds that gives us all lower interest rates."
Those worries are longer-term threats and not likely to put major obstacles in the way of another year of vibrant economic growth. But as Goldilocks discovered, even if the porridge is just right, when the Three Bears return, so do the problems.