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.
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.
I agree the future is hard to predict, but I don’t know about your claim the US engages in similar trickery.
Economic statistics for the US with fully disclosed methodologies are readily available. US military spending in 2016 was 3.3% of GPD, according to the World Bank. [1] New York’s economy is more industrially diverse than average (ranked 17 out of 51) with Long Island as the most diverse county in the state. [2] I realize that fed report is out of date, but as of 2016, the NY Metro area itself had a GDP of nearly $1.7 trillion, making it one of the larger economies in the world. [3]
> I agree the future is hard to predict, but I don’t know about your claim the US engages in similar trickery.
The US clearly engages in the sort of behaviour that was described as trickery. The state is massively indebted and piling on huge deficits each year, and the only thing that keeps lenders lending money is this belief that the US will always repay its debt. Meanwhile the US deficit is used as a never ending source of free money created out of thin air that's injected into the economy, thus contributing to artificially inflate the volume of money being exchanged (i.e., the GDP)
The New York economic situation is much worse than 2002, an didn’t the far from the rest of the country. The state and local government now gets like 30-40% of revenue from financial services.
If you compare the economy of 1967 to 2017, it’s more telling for NYC. Upstate is even more dramatic. The economy in central/western NY imploded.
The trickery is around the massive debt and the use of the dollar as a reserve currency. 100 dollar bills represent 80% of currency in circulation are like the equivalent of beaver bonds overseas.
You’re correct. Humans seem to be hard wired to make predictions based on extrapolating recent experience.
Vary few (especially not journalists) can use logic and intelligence to overcome this bias.
Studying a little history, applying some simple logic, tells me that - as China’s economy approaches half of USD $57k GDP per capita (real nominal not fantasy PPP) eg Portugal $20k, their growth will slow dramatically - now $8k below Brazil so they can still grow fast, beacuase of easy gains from Catch Up ie leveraging R&D paid for by rich countries. Central planning does have advantage of better infrastructure but disadvantage of Less Experimentation Less Trial & Error, this will be more important for driving Innovation which will be required to sustain growth, once they are past the easy wins of catch-up.
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.