Back in 2010, there was an issue ad showing a “Chinese professor” in the year 2030 lecturing his students about America’s collapse. “Why do great nations fail?” he asked. “The ancient Greeks, the Rome Empire, the British Empire, the United States of America — they all make the same mistakes, turning their back on the principles that made them great.”

Sure, America faces some big economic challenges. But what about the other side of that equation? Does China have the right principles and institutions to dominate the 21st century?

Consider: China currently has a $9 trillion economy vs. $17 trillion for America. It makes a great deal of difference how fast China grows in the future. For instance: If China were to grow as fast the next two decades as it did 2000-2010, about 9.7% a year, its GDP would grow to $60 trillion by 2033. Such an increase, Lant Pritchett and Larry Summers write in their new paper “Asiaphoria Meets Regression to the Mean,” would mean a gain in GDP “more than three times as large as the current U.S. economy. The continuation of current growth rates would make China far and away the world’s dominant economy.” This is the future depicted in the Chinese professor ad.

But most economists don’t think that scenario as likely as a slowdown. So let’s knock off a couple, three percentage points and figure 7% growth. If that were to happen, China GDP would grow to $36 trillion by 2033.

But Pritchett and Summers are even more pessimistic. As they calculate, historical trends suggests Chinese growth of just 3.9%, meaning a 2033 China GDP of $21 trillion, not $60 trillion. By contrast, US GDP — modestly assuming 2% real growth and 2% inflation — would be $36 trillion. America would remain the world’s dominant economy.

Here is why Pritchett and Summers are gloomy about China (and India for that matter):

Consensus forecasts for the global economy over the medium and long term predict the world’s economic gravity will substantially shift towards Asia and especially towards the Asian Giants, China and India. While such forecasts may pan out, there are substantial reasons that China and India may grow much less rapidly than is currently anticipated.

Most importantly, history teaches that abnormally rapid growth is rarely persistent, even though economic forecasts invariably extrapolate recent growth. Indeed, regression to the mean is the empirically most salient feature of economic growth. It is far more robust in the data than, say, the much-discussed middle-income trap.

Furthermore, statistical analysis of growth reveals that in developing countries, episodes of rapid growth are frequently punctuated by discontinuous drop-offs in growth. Such discontinuities account for a large fraction of the variation in growth rates. We suggest that salient characteristics of China—high levels of state control and corruption along with high measures of authoritarian rule—make a discontinuous decline in growth even more likely than general experience would suggest. 

In other words, not only does history suggest superfast growth is tough to maintain, but that finding may especially be true of nations with awful institutions. Authoritarian states or those with statist macroeconomic policies rife with crony capitalism are typically not the sort able to generate dynamic growth over the long term. (You need to think about this, too, Washington.)

This is hardly good news, though. The faster China and India grow, the faster the global economy grows and the faster millions of people move out of poverty. What’s more, slower growth might affect the stability of the Chinese regime with unpredictable consequences:

 … much geopolitical analysis has focused on the implications of a rising China, and certainly Chinese international relations theorists have extensively studied past rising powers. Contingency planning should also embrace scenarios in which Chinese growth slows dramatically, presumably bringing with it a range of domestic and international political implications.

Then again, without regime change China may be unable to transition to a more organic, free enterprise-driven economy capable of better generating and using innovation. I think I have a few questions for that Chinese professor.

Follow James Pethokoukis on Twitter at @JimPethokoukis, and AEIdeas at @AEIdeas.