And nobody noticed. It really is amazing that a prediction of this magnitude can be made – that the most powerful nation in the world since 1945 is about to lose its crown – and barely anyone in that nation takes note of the bombshell. The International Monetary Fund has announced that China will overtake the USA in terms of GDP “Purchasing Power Parity” in 2016, just five years from now. MarketWatch relates:1
Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and rising.
Just 10 years ago, the U.S. economy was three times the size of China’s.
Keep in mind that, “even at its peak, Japan only had half of America’s economic output . . . and the USSR produced only a third.”2
Also remember that this presumes that the American economy doesn’t crash again and that the U.S. can hang onto world reserve currency status, both of which seem extremely unlikely. If either of those happen, then China could overtake us much sooner.
Edit: On a related note, you should watch this commercial (which has been banned from a lot of U.S. television stations) on U.S.-Chinese economic relations.
Footnotes
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