It’s official: America is now No. 2

Jakarri Demery

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Makes sense. They have been producing like crazy. I'm taking advantage of this by finding products to source and then resell. Even though they're number 1, they still fall far behind in important things like quality and durability. So the challenge is always to find a supplier that produces quality material.
 

Mika

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I definitely saw this coming. Next to nothing is made in the USA anymore. Heck, it's hard to find anything here that is not made in China. I guess to some it may come as a shock but a lot of us have seen it coming for a long time. Once China takes over and starts selling things at a higher cost, maybe the government here will realize that we need to actually make our own stuff.
 

Divbyxero

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Sorry valiantix! I am ashamed (especially as an American) to have thought the terms America and USA were synonymous. I guess I never really thought about it. Thanks for clearing that up!
Also, its interesting to hear that China's economy is on the decline, but I agree, the US defecit is frightening...
 
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Is China really Number One?

I did read an article which explained that the figures given by China about their economy may not all be accurate. They, apparently, have a different way to reporting statistics. I am not saying that the Chinese cheated. Let's just say that they think differently.

Anyway, Number One or Number Two is just a number. What's important is the actual significance. So, if China is Number One, does it change anything? I think not. They will still be pushing their agenda of economic progress. Yes, they can actually push it. Being a communist country has its advantage in that the citizens do not have much say in how the country is governed or how the national economy is developed.

Taking a broader view, I think it's a good thing that China is posing a serious threat to the US dominance in the world market. Monopoly has never been good for business development. Perhaps we can look forward to the day when China can also challenge the US as a superpower.
 

Kamarsun1

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Hang on to your hats, America.

And throw away that big, fat styrofoam finger while you’re about it.

There’s no easy way to say this, so I’ll just say it: We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.

This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.

I reported on this looming development over two years ago, but the moment came sooner than I or anyone else had predicted. China’s recent decision to bring gross domestic product calculations in line with international standards has revealed activity that had previously gone uncounted.


These calculations are based on a well-established and widely used economic measure known as purchasing-power parity (or PPP), which measures the actual output as opposed to fluctuations in exchange rates. So a Starbucks venti Frappucino served in Beijing counts the same as a venti Frappucino served in Minneapolis, regardless of what happens to be going on among foreign-exchange traders.


PPP is the real way of comparing economies. It is one reported by the IMF and was, for example, the one used by McKinsey & Co. consultants back in the 1990s when they undertook a study of economic productivity on behalf of the British government.

Yes, when you look at mere international exchange rates, the U.S. economy remains bigger than that of China, allegedly by almost 70%. But such measures, although they are widely followed, are largely meaningless. Does the U.S. economy really shrink if the dollar falls 10% on international currency markets? Does the recent plunge in the yen mean the Japanese economy is vanishing before our eyes?

Back in 2012, when I first reported on these figures, the IMF tried to challenge the importance of PPP. I was not surprised. It is not in anyone’s interest at the IMF that people in the Western world start focusing too much on the sheer extent of China’s power. But the PPP data come from the IMF, not from me. And it is noteworthy that when the IMF’s official World Economic Outlook compares countries by their share of world output, it does so using PPP.

Yes, all statistics are open to various quibbles. It is perfectly possible China’s latest numbers overstate output — or understate them. That may also be true of U.S. GDP figures. But the IMF data are the best we have.

Make no mistake: This is a geopolitical earthquake with a high reading on the Richter scale. Throughout history, political and military power have always depended on economic power. Britain was the workshop of the world before she ruled the waves. And it was Britain’s relative economic decline that preceded the collapse of her power. And it was a similar story with previous hegemonic powers such as France and Spain.

This will not change anything tomorrow or next week, but it will change almost everything in the longer term. We have lived in a world dominated by the U.S. since at least 1945 and, in many ways, since the late 19th century. And we have lived for 200 years — since the Battle of Waterloo in 1815 — in a world dominated by two reasonably democratic, constitutional countries in Great Britain and the U.S.A. For all their flaws, the two countries have been in the vanguard worldwide in terms of civil liberties, democratic processes and constitutional rights.
I could see this coming awhile ago. China makes almost everything we buy so of course their economy is rising strong. China has it's hands in many projects that are very important to us. China is a strong force world wide and I would like to see how this is going to effect other nations.
 

Kamarsun1

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Is China really Number One?

I did read an article which explained that the figures given by China about their economy may not all be accurate. They, apparently, have a different way to reporting statistics. I am not saying that the Chinese cheated. Let's just say that they think differently.

Anyway, Number One or Number Two is just a number. What's important is the actual significance. So, if China is Number One, does it change anything? I think not. They will still be pushing their agenda of economic progress. Yes, they can actually push it. Being a communist country has its advantage in that the citizens do not have much say in how the country is governed or how the national economy is developed.

Taking a broader view, I think it's a good thing that China is posing a serious threat to the US dominance in the world market. Monopoly has never been good for business development. Perhaps we can look forward to the day when China can also challenge the US as a superpower.
It is very possible that China could challenge the US as a superpower. The US can't be on top forever. Nations lose power and control all the time, and America is no different. We have so many problems that we can't seem to fix, and if we don't fix them we will fall further down the ranks in the future.
 

Dez97

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I know America is feeling some type of way, but hey we've all known they had the better economy. They have smarter children, and charge less for everything, everything we own is made in china. It was very much expected.
 
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It is very possible that China could challenge the US as a superpower. The US can't be on top forever. Nations lose power and control all the time, and America is no different. We have so many problems that we can't seem to fix, and if we don't fix them we will fall further down the ranks in the future.
I am no fan of war and violence but I look forward to the day when the US is not the one and only superpower in this world. There needs to be another superpower to balance things. China may be the next superpower. Who knows, India may quietly slip into this role, too. India has the manpower resources and India has a large pool of IT expertise.
 

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The Chinese economy has exploded recently and it may be beneficial to consider what it is that they are doing that we are not. Maybe it is connceted with our increasing use of gadgets, after all, as Dez97 points out, everything we own does seem to be Chinese-made. Another poster queried whether China's Communist principles have helped their economy. This could well be the case but it would be hard to see such a model working successfully in Western countries.
 
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This could well be the case but it would be hard to see such a model working successfully in Western countries.
Not the communist model, for sure. That's something the Western countries would not accept. However, the free market model is also a working model. Yes, there are weaknesses in the free market model, but those are not weaknesses which cannot be corrected.
 

DeltaForce103

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It's hard to understand the constant fear-mongering that seems to be in vogue when it comes to the US-China relations. Here are some data points.
  • China managed to exceed the US in GDP by Purchasing Power Parity.
  • It is still second in terms of nominal GDP, another way to measure gross domestic product, by around $7 trillion.
  • China has a population of 1.37 billion.
  • The US has a relatively much lower population of 316 million.
A few more facts to consider,
  • Per capita income in China is $11,850. Slightly below the global average.
  • Per capita income in the US is a whopping $53,960. Taking a few other factors into account such as cost of living and government taxation, the average American is still among those in the world with the largest amount of buying power.
The Chinese have risen spectacularly from a half starving population with per capita income and living indicators near that of Africa in the '60s to the stage where they are nearing the social indicators of the West. However, the landscape changes quickly when the statistics are framed in terms of per capita, as China is still far behind the world's only superpower.

It's also perhaps worth remembering that these are people too. People who are nearing their economic potential and are beginning to enjoy the benefits of higher living standards. What is good for China, may actually be good for humanity on the whole, since they form a sizable portion of it. And only bad for US hegemony, which has never benefited anyone but a small corporate elite.
 

Personaleek

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I do not understand why or how, people think the term "america" means the USA or United States of America... it does not! America, means the whole continent of America, which is composed of North, Central and South America. The USA is "one nation" of people recognized as being part of the continent called America. So when I see people writing America this and that, and then imply the US or USA represent the whole of America, is a clear indication of their ignorance and arrogance! For example, China is not the whole of Asia, hence people do not write,"It's official, Asia is now number 2..." Yeah, it's grammatically retarded.
Well, America includes the US. So saying 'America' is not wrong, but it's not completely right either. USA is often referred to as 'America', or even 'North Ameria'.

I'm not surprised by this fact at all. China has been gaining on USA for quite some time now. Pretty much everything that is made nowadays has been made in China.
 

missbishi

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The "free market" model is very interesting. I wouldn't necessarily agree with other libertarian ideologies but this definitely has advantages. I thought maybe something would need to happen to prevent monopolies but we already experience this to a certain degree. Also, it could be very difficult for new businesses to succeed with an unregulated market in place.
 

DeltaForce103

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China does not follow a communist model. Neither does the US follow a capitalist model/ implement free-market policies. This isn't an opinion, both countries and the structure of their governments have little to do with the economic/social theory that they claim to espouse.

China is a textbook example of an authoritarian capitalist country. The country has no major social programs, the means of production is not collectively owned, and while most of the industries are state-owned they are traded on the stock-market and capitalistic in nature. China has adopted many capitalist policies, especially with regards to competition, but retained control of the market through their authoritarian political structure. Read any analysis of the Chinese economy, and you'll find that many economists consider it to be capitalist. This authoritarian structure is often said to be their main advantage against the US.

The US seems to be a mix of fascist, keynesian and corporatist economic thought. But certainly not pure capitalism. In other words, both are a haven for rich oligarchs. GDP indicators have their place, but they show nothing of rampant economic inequality and classism.
 

Dez97

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I definitely saw this coming. Next to nothing is made in the USA anymore. Heck, it's hard to find anything here that is not made in China. I guess to some it may come as a shock but a lot of us have seen it coming for a long time. Once China takes over and starts selling things at a higher cost, maybe the government here will realize that we need to actually make our own stuff.
LOL I completely understand and have the same opinion. Nothing you ever buy says its made in America .
 

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