Tesla CEO Elon Musk thinks the Chinese economy is well equipped to greatly surpass the U.S. in the future by at least two-fold, and that would increase tensions between the two country’s militaries.
Musk, who is also CEO of the space exploration company SpaceX, was attending an Air Warfare Symposium in Orlando, Fla. where he mentioned these predictions during a fireside chat with U.S. Air Force Lt. Gen. John Thompson, according to CNBC.
“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.
He went on describe what may be driving China to want to accelerate its economic activity.
“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 U.S. and Chinese economies are already solidly in first and second place in the world, with the U.S. holding a quarter of the world’s nominal GDP at $21.44 trillion. China holds $14.14 trillion, and according to the Nasdaq, its the fastest-growing trillion dollar economy in the world.
Musk thinks that China’s size could be a huge factor for its growth going forward. China has more than 1.3 billion people, which is almost four times as many people in the U.S. (330 million).
“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 and the U.S. are already feuding over 5G technology, while also trying to suss out a deal in a prolonged trade war. The two sides signed phase one of a deal in January, but there are still many issues to work out. If China’s economy managed to outgrow the U.S., it would most likely only increase the tensions between the two countries.
Musk emphasized a need for innovation during his conversation with Thompson, and he even thinks China could overtake the U.S. in developing space tech.
“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.”
What does Musk think is going to fuel that innovation? Competition. He specifically pointed to the Pentagon’s most expensive weapons system: Joint Strike Fighter.
“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,” Musk said, in reference to Lockheed Martin’s F-35 program.