power #1: China Replaces US This Year

[Turk.]

May 02, 2014 12:16

Sometimes size DOES matter. China may pass the US and become the world?s most important economy this year, according to the World Bank. It would take the position the US has held since 1872.

Previous studies have suggested China could become the world's biggest economy by 2019.

Ever since the 2008 financial crisis, the Chinese economy has contributed a quarter of total global growth. Between 2011-2014, China?s economy will account for 24 percent, according to IMF estimates.

In comparison the US economy will only show an increase of 7.6 percent over the same period.

The predictions are hard to calculate as the latest estimates are based on purchasing power parity. The index attempts to assess the size of an economy based on the assumption that prices of non-tradable goods and services are a lot lower in poorer countries, says the Financial Times (FT).

The evaluation process of the service may differ, as a haircut in China may cost much less than in the US, however its quality may differ as well.

The same problem touches upon the quality of tangible goods. A DVD player bought in China may be way cheaper than a US one, however there is no warranty that it will last longer than several months. Besides US goods are sold with far more consumer protection laws, which through more scrutiny and inspection, delivers a better product.
Source

[DocM]

Jan. 20, 2017

[MDboyz]

Ofc, it's not surprised as all.  More and more Chinese join work force to feed their family, while more and more American join welfare and foodstamp.

[T3X4S]

The company I work for is about to release their product on the market - and the U.S. isnt even on the list of countries.

Their #s suggest if they get 1/10 of 1% of China's market - they will hit capacity on their brand new manufacturing plant.... a $70,000,000 facility

[(Account no longer active)]

It's actually the US's fault. Some time ago someone thought up that goods would be cheaper to manufacture in China. Then, BOOM.

 

Now, there's too much competition across all markets. China has 'learned' and have made copies of everything (including integrated circuits). Then again, look at the mobile phone: I no longer need to by a compass, mp3 player, GPS, camera or 100s of other accessories, because of technological advancements (but these are only small value items, compared to cars for example, in which local manufacturing can be sustained by proper control of competition (IMHO)).

[Steven P. Administrators]

It's not surprising when most western economies have outsourced in favour of cheap labor, vs cost of living in the west. I mean even customer call support is outsourced to faraway lands these days because it's cheaper!

[Osiris]

The surprising thing about this change is that people seem surprised. Putting aside all the changes in the world over the last 20 odd years, there's a couple thousand years of human history that demonstrates power and the centre of the world never stays in the one place forever.

 

You can't really blame the outsourcing or the functions of the economy on this change, in a global world where goods and people can be moved around so quickly you would be throwing out the market mechanisms some love so much and generating inefficiencies to try and keep manufacturing and support centres in these countries.  On top of that in the US case it never would have worked because the corporations that could maximise profits by making these changes just would have lobbied until the legislation allowed them to move offshore. 

 

I believe where the theory has come off the rails is that the first world was meant to move their economies and citizens to being knowledge economies of skills based workers, that hasn't happened as fully as would be required - for a variety of reasons.  We've also failed to capitalise on opportunities like we did in the past - the renewable energy market should have been lead by the West who have generally been considered to have the technological advantage, it could have been the next silicon valley, instead we failed to recognise it as a potential growth market and now China is the number 1 in investment infrastructure and continues getting more tech firms over there due to these investments that just aren't near the same scale in the western markets.

[compl3x]

It's not surprising when most western economies have outsourced in favour of cheap labor, vs cost of living in the west. I mean even customer call support is outsourced to faraway lands these days because it's cheaper!

 

Bingo. It's pretty easy to build a strong economy if you have an inexhaustible supply of slave or near-slave labor.

[Kriz]

Just waiting for the announcment.. US DECLARES WAR ON CHINA

[AsherGZ]

Just waiting for the announcment.. US DECLARES WAR ON CHINA

They can't afford one. :D

[cork1958]

It's not surprising when most western economies have outsourced in favour of cheap labor, vs cost of living in the west. I mean even customer call support is outsourced to faraway lands these days because it's cheaper!

 

Exactly what business is all about, being cheap!! ;)

[guru]

Bingo. It's pretty easy to build a strong economy if you have an inexhaustible supply of slave or near-slave labor.

well post Industrial revolution,  Its always been that way, British and Europeans built their economies and colonization and slave labor. Its either been slave labor or being lucked out with resources (Australia, Oil rich Arab countries). only exception to this is possibly United States.

[spenser.d]

Hooray for China?

[Astra.Xtreme]

Until the US stock market loses significance, the size of the economy means basically nothing.   Regardless, we're seeing pretty clear side-effects of capitalism.

[xrobwx71]

Just waiting for the announcment.. US DECLARES WAR ON CHINA

You don't have to worry about that with the current administration as they are more worried about class warfare, climate, and welfare.I don't think there is one economist among them.

Until the US stock market loses significance, the size of the economy means basically nothing.   Regardless, we're seeing pretty clear side-effects of capitalism.

The current administration fights capitalism at every turn.

[COKid]

Good. Hopefully this means that whenever a natural diasater strikes somewhere in the world, you guys won't be coming to us asking for a handout. Contact Beijing instead. :)

[boobless]

You don't have to worry about that with the current administration as they are more worried about class warfare, climate, and welfare.I don't think there is one economist among them.

The current administration fights capitalism at every turn.

Yep, hence the stock market being at its highest level ever under this administration....wait.

[Lenny Bruce]

I heard about this on NPR. There are some ways in which the U.S economy is better than China, and there are some ways in which the Chinese outrank the U.S.

For example, the Chinese outrank the U.S. in terms of purchasing power, which is basically a measure of how much one can buy with one unit of currency. You can buy less goods with 1 U.S. dollar, and possibly more goods with 1 Yen (or equivalent amount of currency).

However, China has a large population, so their GDP per capita is incredibly low, GDP per capita being the amount of GDP that each person in the country gets, considering that the GDP were to be divided evenly. For example, the U.S. GDP is around 16 trillion, and because there are 310 million people, we would divide 16 trillion/310 million, which gives us an amount that's close to 50,000 dollars. I don't know about China's GDP per capita, but it should be expected to be a lot lower than the U.S GDP per capita, due to the fact that there are more people.

 

In conclusion, the United States economy is more powerful than China's in some ways, but China is also more powerful than the U.S in some ways. It will be incredibly interesting to watch this develop through the next decade or so.

[guru]

Until the US stock market loses significance, the size of the economy means basically nothing.   Regardless, we're seeing pretty clear side-effects of capitalism.

its just a matter of time till US markets loose their pre-eminence if debt and left wing economics shackle American economy. dont get me wrong, even then Us market will continue to be important  but kinda like Nikkie, Hangseng, DAX, FTSE just not THE market people go to raise capital.

[Hum]

I welcome our new Asian overlords :o

[-T- Member]

Gee Thanks Obama

[+Eternal Tempest MVC]

Ofc, it's not surprised as all.  More and more Chinese join work force to feed their family, while more and more American join welfare and foodstamp.

 

You do realize construction, done by the government, and it's the government artificially boosts there GDP, and they could be facing a disastrous encomium bubble.

Do a search on Chinese empty / abandoned cites. I love looking at Urban exploration pictures, Chinese abandoned completed, partially incomplete, and incomplete stuff come up a lot.

 

There's also "technically" Communist, but with there growing middle class, china is slipping in to socialism in different facets of there country and also have social welfare programs and subsidies for it's citizens.

 

I also feel tax breaks to companies that are multi-national, that float US tax breaks, and perks to outside the US are wasted of breaks with little job creation. 

[wrack]

Not to mention India too coming in 3rd place topping Japan.

 

http://thediplomat.com/2014/05/world-bank-india-overtakes-japan-as-worlds-third-largest-economy/

http://www.huffingtonpost.ca/2014/05/03/china-worlds-largest-economy_n_5255825.html

 

Things are changing indeed.

[cacoe]

But what of the ghost cities that China is building? They're apparently building new cities that no one can afford to move into. Their construction market is booming but how long until this comes back to bite, and how hard?

 

[ShadowMajestic]

They should count the EU as a single nation. US will be 3rd :/