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The real story is the one no one has been talking about. The US has been the world's largest economy for the past 100-150 years. In another ~10 years, that will

• forapurpose 9y ago
  The other real story, though a few years old now, is the reduction of the individual European powers from world leaders to second-tier powers. The rise of China has made the first tier out of reach to countries with only 60-80 million people (such as the UK, France, and Germany). If the European powers combined - somehow, who knows how - then they would have the weight to be global powers and have more influence to move global affairs in directions the Europeans desire. With only 60 million people, the UK is destined to be a bit player. One wonders why a neighboring second tier Eurasian power would want to disrupt European integration and the resulting arrival of a superpower on their doorstep. Stand together, or hang separately.
  • tellarin 9y ago
    EU - UK vs. Russia Ukraine as the "trial" case?
    • Balero 9y ago
      Russia has a smaller economy than Italy. They have an disproportionally large military compared to their size, but this is running much closer to what they can sustain than European countries, which run a disproportionally small military.
      • adventured 9y ago
        To add to that, Russia's economy hasn't expanded much in real terms in the last 30 years. They've expended vast natural resources to slightly more than tread water. Russia's GDP in the late 1980s was around half a trillion dollars. Today it's around $1.3 trillion. Accounting for even a small amount of annual inflation, they've grown the economy by perhaps 20% to 30% over 30 years. And that's coming from an extremely backwards Communist system.
        • Bendingo 9y ago
          >Russia's economy hasn't expanded much in real terms in the last 30 years Russian GDP has dropped since 2014 due to sanctions. If you look at prior to sanctions, growth is more impressive. From [1]: GDP (USD billion) 1990 2014 --------------------------------- UK 1093 2999 India 317 2035 Russia 517 2064 Recent growth is much stronger [2] [3]. [1] https://www.google.com.au/publicdata/explore?ds=d5bncppjof8f9_&met_y=ny_gdp_mktp_cd&idim=country:RUS:IND:GBR&hl=en&dl=en https://www.google.com.au/publicdata/explore?ds=d5bncppjof8f... [2] https://www.reuters.com/article/us-russia-gdp/russias-gdp-growth-exceeds-2-percent-in-third-quarter-economy-minister-idUSKBN1CJ0IV https://www.reuters.com/article/us-russia-gdp/russias-gdp-gr... [3] https://www.focus-economics.com/countries/russia/news/gdp/economy-gains-momentum-in-q2 https://www.focus-economics.com/countries/russia/news/gdp/ec...
  • hardlianotion 9y ago
    Who is the superpower in this scenario? What is the analogy to hanging, in this instance? Is not being part of a superpower a necessarily bad thing? If so, why?
    • jopsen 9y ago
      GP is refering to Russia. Whether a superpower we can debate, but they still have massive influence. > Is not being part of a superpower a necessarily bad thing? So long as you have NATO for defense and EU for free trade, then yeah, what is the difference?
      • geezerjay 9y ago
        Layers. NATO is a layer, one based on hard power. EU membership is another layer, one based on soft power. With regards to power, no one is best served by losing power. If you lose power you will be unable to defend your best interests. If that's a good thing or a bad thing?
    • p1mrx 9y ago
      "second tier Eurasian power" = Russia. "the resulting arrival of a superpower" = a stronger version of the EU.
  • rayiner 9y ago
    One wonders why any of this matters. I’d wager your average German wouldn’t want to move to the US, much less China.
  • Spooky23 9y ago
    Superpower status will be less relevant as oil becomes less relevant. Modern society requires sea lanes to the Middle East. Once you have nukes, superpower status has a power ceiling. The US demonstrated that we can grind up a non-nuclear power like Iraq. We cannot do the same to any number of other tiny countries that have the bomb or similar leverage.
• alexasmyths 9y ago
  "until it eventually gets lapped some time in the mid-21st century" Ha - nobody can see that far out. Also, it's all based on relative value, PPP - so it's an incredibly difficult thing. One could also argue that China surpassed the US a long time ago.
  • seanmcdirmid 9y ago
    PPP is a horrible measure when many things actually cost more in china than they do in the states. Ya, if all you are concerned with is food and services, $100 in china is greater than $100 in the USA. But if you want to buy a house? A nice Honda? A pair of Levi jeans? Those are all 2-3X or even more. Chinese go abroad to shop for good reasons.
• ChuckMcM 9y ago
  People (and by people I mean mostly economists :-)) talk about that all the time. There is an interesting discussion about comparing two economies that are not based on the same fundamental principle (like comparing electric cars to gas cars based on their "miles per gallon" and using an arbitrary metric to transmute kWh into gallons of gasoline). The Chinese government works much more directly in twisting the knobs of the economy, and the government regularly misleads with their economic numbers (sort of like companies that change the accounting rules on the numbers they report). As a result other methods get devised to try to estimate the Chinese GDP and its relative independence from other economies. That said, they are expected to surpass the US on a comparative GDP model, what is less well understood is how durable their form of market management can be.
• whathaschanged 9y ago
  They said the same about Japan. Meet the new contender, same as the old contender.
  • com2kid 9y ago
    > They said the same about Japan. Meet the new contender, same as the old contender. Japan has a smaller population than the US. Even with early automaton providing a huge multiplier effect to efficiency, they weren't likely to catch up. Combine that with social pressure against immigration. The US benefited a lot from brain draining other countries, Japan never did. The odds of a country being the source of innovation are higher if all the world's geniuses keep moving to that country. Next up, will China be willing to (keep) hiring away American professors? If China can clean up its air quality, continue to improve standards of living, and open itself up to immigration, it will be on track to best the US.
    • jopsen 9y ago
      China only needs to pull their population out of poverty and build a middle class to be the biggest economy. Shear numbers means that if they stay away from self-destructive policies, civil war, and climate change doesn't squash their resources they'll be the biggest economy. Not per capita, but in total yes, and wouldn't it be unfair if they didn't... Consider how many people would live in poverty, if they don't grow.
    • seanmcdirmid 9y ago
      Those are a lot of ifs. Keep in mind China is still by far a net emigrant country, they still have brain drain problems that work in the USA’s favor.
• Aron 9y ago
  I'm mostly only interested when they pass us on per capita income. It is notable though that some of their megacorps are achieving valuations akin to our largest. Maybe some day they will have a global brand.
• com2kid 9y ago
  > The real story is the one no one has been talking about. The US has been the world's largest economy for the past 100-150 years. In another ~10 years, that will no longer be the case. Every year that passes afterwards, the US is going to fall further and further behind China, until it eventually gets lapped some time in the mid-21st century. It's going to be "interesting" to see what happens then. With competent governance, max size of the economy is linearly tied to population, with some wiggle room for natural resources. This is why Japan was always going to level off, and why China is going to be on top.
  • soundsop 9y ago
    > max size of the economy is linearly tied to population > why China is going to be on top India will have a larger population than China (http://statisticstimes.com/population/china-vs-india-population.php http://statisticstimes.com/population/china-vs-india-populat...) so it should end up on top.
    • modarts 9y ago
      OP did use this disclaimer: > competent governance India is far from competent in this regard.
      • soundsop 9y ago
        True.
  • paulcole 9y ago
    >until it eventually gets lapped some time in the mid-21st century What does this mean exactly? Getting lapped means getting passed and then passed again. How does that make sense in this context?
    • 317070 9y ago
      It becomes double the size.
• adventured 9y ago
  The US economy out-grew the Chinese economy between 2013 and today, in dollar terms. It'll take China 30 to 40 years to catch the US at the present trajectory. They're outrunning the US at about $200 billion per year if you assume present numbers going forward and if you believe the claimed Chinese growth figures. The gap is $7.5 to $8 trillion, while China's growth is slowing by the year. That's ~30 year span is a best case scenario for China. The far more likely scenario, is they collide with common economic reality, with standard recessions, growth problems, debt problems, along with a continual decline in their growth rate. The last 20 years they've gotten to avoid most of those problems due to massive easy slack to fill in, in their formerly backwards economy. The debt is already there however, as they've taken on at least $50 trillion in new debt to fake their growth the last ten years (including shadow debt at the state enterprise and local muni levels). That's something they can never repeat going forward (their system is already shaking under the debt, they're constantly having to inject liquidity and restrict capital flows to keep the house of cards standing). China has a roughly $11.5 trillion economy growing at a claimed 6.5%, with a persistent decline in their growth rate. The US has a $19 to $19.5 trillion economy. The US is able to grow at 2.5% routinely, possibly higher in the near future. In 2014, China's economy was $10.48 trillion. In 2015, it was $11.06 trillion. In 2016 it was $11.2 trillion. In the time China added $1 trillion to its economy, the US added $1.6 trillion to its economy. At 2.5% on $19 or $19.5 trillion, the US can routinely add nearly half a trillion per year to its economy. At 6% on $11.5 trillion, China is adding $650 to $700 billion to its economy in 2018. Gradually slow their growth to even 4% to 4.5% over the next four or five years, and they may never catch the US. I'd be willing to bet the US can sustain 2% to 2.5% growth going forward, while China can't sustain above 6%. This is especially obvious given the dramatic down curve over ten years in their growth rate. To add further to that point, there is wide agreement among economists that China aggressively lies about their GDP growth numbers, it's more likely to be closer to half the stated number.
  • Spooky23 9y ago
    The US does similar trickery. How much of the economy is propped up by transfer payments and military related expense, all funded by borrowing? Once diverse regional economies like the NY Metro Area are increasingly dependent on a narrow set of industry. IMO, the future is hard to predict and is likely to diverge from the 20th century.
• MarkMc 9y ago
  If US population growth rate over next 100 years was same as in the 20th century then it might stand a chance of regaining the crown of biggest economy (and strongest military). But that seems unlikely due to widespread anti-immigration sentiment in the US.