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China to Surpass USA as World’s Largest Economy THIS YEAR

George Washington's picture




 

Financial Times reports:

The US is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies.

This is – rightly – front page news (hat tip to Drudge for the headline):

But this is not entirely surprising.

As we reported in April 2012, leading Chinese economic analyst (and American ex-pat) professor Michael Pettis argued in 2011 that China’s GDP might already higher than America’s in terms of purchasing power parity.

And we noted that Arvind Subramanian – former assistant director in the Research Department of the International Monetary Fund, and now senior fellow jointly at the Peterson Institute for International Economics – says that China passed up the USA in 2010.

 

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Wed, 04/30/2014 - 22:17 | 4714684 Kprime
Kprime's picture

With Obama at the helm it won't be long before Venezuela surpasses the U.S.

Wed, 04/30/2014 - 20:56 | 4714452 patb
patb's picture

China can't project power globally, yet, but they sure could slug it out in theater.

I hope they hold off on muscle flexing for 5-10 years.

Wed, 04/30/2014 - 16:21 | 4713573 novictim
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CHINA TO SURPASS USA!
...or at least that was what China reported after arbitrarily adding a zero to their GDP figures. LOL!

Wed, 04/30/2014 - 15:42 | 4713444 I Write Code
I Write Code's picture

I'll bet some large percentage of the US economy, 10%, 20%, who knows, is already bogus double-counting of stuff made in China, imported, and then marked up here.

But that's *manufacturing* numbers.  Plus the US has a big built-in for military and aerospace (and China's military numbers seem to be large and growing too but they seem to be quiet about them).

Talk just civilian economies, not manufacturing, and maybe it's still an issue.  Talk civilian manufacturing, and does ANYBODY believe the US is still in first place today, or even five years ago?

Wed, 04/30/2014 - 15:05 | 4713288 Peter Pan
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China could well win first place in one year and lose it the next.

Wed, 04/30/2014 - 14:02 | 4712904 mumbo_jumbo
mumbo_jumbo's picture

isn't this the same country that printed 5X as much as the USA and BOJ did COMBINED? so if we print moar we.......win?

Wed, 04/30/2014 - 12:10 | 4712415 bcking
bcking's picture

Barry Soetero has succeeded in modeling the USA after that shining beacon of ideal cities, Detroit. Well done. You have implemented my master plan. 

"How fortunate for the rulers that men do not think" - Adolf Hitler

Wed, 04/30/2014 - 12:16 | 4712441 Gaius Frakkin' ...
Gaius Frakkin' Baltar's picture

The plan was well into the implementation phase before that jester was appointed.

Wed, 04/30/2014 - 15:16 | 4713336 snr-moment
snr-moment's picture

True, But we can speed it up with an 80% top marginal rate and a one time wealth tax.  FORWARD!!

Wed, 04/30/2014 - 10:58 | 4712027 joego1
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good! Hand them the baton and they can go be a superpower for a while. Meanwhile we can default on our debt and regroup.

Wed, 04/30/2014 - 10:26 | 4711879 messystateofaffairs
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China could be making more total stuff of real value than the US but I don't trust GDP numbers. They are so dithered up by govt. statisticians and measure in govt's own useless "input" which don't mean much to a real producing person. Just a useless distraction.

Wed, 04/30/2014 - 10:22 | 4711866 the grateful un...
the grateful unemployed's picture

is it large or just obese?

Wed, 04/30/2014 - 09:33 | 4711621 Bastiat
Bastiat's picture

Another empire of leverage and lies.

Wed, 04/30/2014 - 09:30 | 4711606 Son of Captain Nemo
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Russia... China... It's all there fault for making us "unproductive" and incapable of "making things" so cheaply!...
We may have to devise a plan some day to buy out there neighbors and encircle them with military bases so that if we don't get what we want from them economically we can threaten them? Even if it bankrupts us in the process...
Oh wait a minute??? We've already done that. Nevermind!
Wed, 04/30/2014 - 11:53 | 4712326 bcking
bcking's picture

Spelling corrections "their fault" not "there fault". Otherwise, I, the great Kim Jong Un agree with your rant. Not bad for a 2nd rate American. Kudos.

Wed, 04/30/2014 - 09:21 | 4711555 Reaper
Reaper's picture

Perception trumps reality. The US is falling behind. The US's great masterminds will produce more dollars to compensate. Printed dollars will be counted as domestic product.

Wed, 04/30/2014 - 12:03 | 4712382 Never_Put_Down
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with the end of the petro dollar, the Fed won't have to do any printing - Combining the new sanctions war with Russia and a sea change in the BRICS nations energy plans, Foriegn FX holdings will be chopped and Trillions of unwanted dollars will come flooding back. Fixing interest rates at zero wont stop that

Wed, 04/30/2014 - 09:11 | 4711509 Vendetta
Vendetta's picture

The globalist politicians and the behind-the-scenes-string-pullers got what they wanted, now if any there is any falling out between china and US... china will turn all that production capacity to the war machine.  yea

Wed, 04/30/2014 - 09:08 | 4711484 Save_America1st
Save_America1st's picture

mission accomplished for the globalist NWO Fascist scumsucking traitors in the District of Criminals.  Way to go assholes.  Hey, I know...raise taxes and off-shore more manufacturing and put the whole country on welfare!  That'll totally grow the economy and make us an economic powerhouse to compete with the Chi-Comms!

Wed, 04/30/2014 - 08:44 | 4711399 CHX
CHX's picture

USA creates debt, China manufactures goods. US forkes green toilet paper to China for goods (it once created itself), China exchanges toilet paper for physical gold. The story is about to change.

Wed, 04/30/2014 - 13:46 | 4712837 kenezen
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Good post!!

Wed, 04/30/2014 - 09:02 | 4711469 F-X
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Except that China has created over seven times the debt the US has since 2008.

http://www.zerohedge.com/news/2014-02-20/pig-python-about-be-expelled-wa...

Wed, 04/30/2014 - 12:10 | 4712372 magnetosphere
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china creates credit thru bank loans.  america is different, it pumps the stock market and issues govt debt

Wed, 04/30/2014 - 09:21 | 4711516 CHX
CHX's picture

That is true, but most of that debt is not government debt (or 100+ Trillion$ unfunded govermint liabilities), and when it is all said and done, the Chines will have 7 times as much gold as the USSA. When TSHTF it's going to be a global cluserF, but in some places the excremental fallout is going to be more severe than in others. China might just duck and cover a bit better. JMHO. Good luck to all.

Wed, 04/30/2014 - 10:38 | 4711941 messystateofaffairs
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At some point all that debt will get defaulted on. I wouldn't be a creditor for it or a debtor holding real assets as collateral against it, thats how wealth gets transferred.

In the meantime the US, under Israels supervision, is busy pissing off the Russians, who along with their new BFF, the Chinese, are fixing to put the petrodollar to bed. Before you know it the two of them will be conjuring up all kinds of fancy weapons, they can do that now, while the US might be scrounging around for gas money for their aging military hardware. The senile old school bully is back in the school yard fucking around with the young turks.

Wed, 04/30/2014 - 22:28 | 4714707 Kprime
Kprime's picture

Apparently you have not been keeping up with the news. 

http://news.usni.org/2013/02/08/navy-lincoln-refueling-delayed-will-hurt...

The Navy had budgeted $92 million for the Lincoln refueling in its FY 2012 budget.

http://www.military.com/daily-news/2014/04/04/carrier-refueling-yanked-f...

If sequestration levels of spending return in 2016, as is currently the law under the Budget Control Act, then the Navy will not be able to afford the five-year, $7 billion effort needed to refuel the carrier, senior leaders have said.

Wed, 04/30/2014 - 13:53 | 4712858 kenezen
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And! Both have deep space capability which we have given up. What's going to happen when weapons arrive up there now that we can't enforce any treaty without our rocketry. It was interesting to see Obama kill our space program that soon!

Wed, 04/30/2014 - 08:02 | 4711294 AnAnonymous
AnAnonymous's picture

China is an integrated element in the 'american' world.

They consume in order to allow 'americans' to consume even more.

China might retain 1/3 and export 2/3 of their overall consumption.

Okay, okay, 'american' greed makes it that when their economy grows, 'americans' only see the 1/3 growing, dismissing that in the doing the other 2/3 that are destined to better 'american' lifes, are also growing.

Such is the 'american' nature, which is eternal.

Wed, 04/30/2014 - 09:58 | 4711769 machineh
machineh's picture

Chinese dentist time: tooth hurty!

Wed, 04/30/2014 - 07:44 | 4711263 ratpack1968
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We blow them away when taken as GDP per capita. China is not without its structural issues (wealth distribution, populations, over-capacity) and has a long way to go to catch up. We can retake this country from the psychopathic oligarchs and get ourselves back on track.  A good start would be a big FUCK YOU to each and every incumbant in November. Stop supporting the system - buy PM's, barter, grow your own shit, opt out of ObamaCare, learn a skill and become an entrepreneur. Think like a sovereign and do what you can to keep your money out of the system.

Wed, 04/30/2014 - 08:38 | 4711370 Okienomics
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I've clicked on some of your links and find them to be frenzied speculative garbage and shite posing as prophecy. It's like a flame to the moth of the human soul. That kind of light is not your friend. Live, love, laugh, do your best to make the world a better place and treat that stuff as toxic waste... To be avoided. The truth is in your heart.

Word of advice from a former prophecy junkie.

Wed, 04/30/2014 - 21:17 | 4714505 Mike in GA
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Very nicely said, Okie. 

Wed, 04/30/2014 - 07:36 | 4711253 F-X
F-X's picture

Does this have any meaning?

India has a slightly bigger GNP than Canada, but over 30 times the population.

Philippines has a slightly bigger GNP than Finland, but 20 times the population.

Argentina has about th same GNP as Sweden, Norway or Belgium.

So? Is there really any comparison at all worth making?

The answer to all my questions is clearly NO!

Wed, 04/30/2014 - 07:06 | 4711221 someoneelse
someoneelse's picture

BS. The same way Nigeria's GDP magically doubled through a definitional change. The numbers are bogus. What's more, if you remove the GDP-enhancing, but wealth destroying, empty real estate across the country, and adjust for the environmental damage that will have to be remediated at some point, their GDP growth trajectory is likely to be barely positive at all. Ever been to a Chinese mall? How many shoppers did you see? With bags overflowing with crap? Not many.

Wed, 04/30/2014 - 07:03 | 4711216 quikwit
quikwit's picture

The idea that more economic transactions is better is itself a flawed assumption.  We should stop this narrative that more is better.  This is the fundamental flaw driving Keynesianism around the globe.  If people don't want something that they don't have, great.  Leave them be.

Wed, 04/30/2014 - 06:45 | 4711196 AdvancingTime
AdvancingTime's picture

Quality is as important as quantity and in that respect it is difficult to determine which country is better off. I tend to think America has a better base. Fast growth tends to mask flaws and weakness within a system, and China has been growing like a weed for years.

To make things worse many of the investment decisions were driven by politics. This has created massive overcapacity. Money has been poorly allocated and often shoveled into deep holes like ghost cities and bridges to nowhere. The article below looks at how and why China is now drowning in overcapacity and debt.

http://brucewilds.blogspot.com/2013/11/china-land-of-overcapacity-and-de...

Wed, 04/30/2014 - 05:09 | 4711125 Hobbleknee
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With all that manpower, it makes you wonder, what took them so long?

Wed, 04/30/2014 - 12:08 | 4712330 magnetosphere
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qianlong emperor to king george III, "we have no need for your country's manufactures", 1792 --> excessive pride. 

and wars with england 1840, england 1860, taipings 1860, french 1880, japan 1895, 8 western powers 1900, russia/japan 1905, civil war 1911+, russia 1927, japan 1930's+, more civil war to 1949, korea 1950, internal repression 1950's, tibet 1956, famine 1957, india 1962, russia 1969, vietnam 1960's+, vietnam 1979, cultural revolution 1960's+. 

opening up to the world starting from 1980.  they are hungry now, and angry.  americans seem to lack the killer instinct, we have grown old

Thu, 05/01/2014 - 00:10 | 4714934 wintermute
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The difference betwen all those other times since 1472 and now is that this time they have got their shit together

Wed, 04/30/2014 - 06:58 | 4711207 Sudden Debt
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and their foodconsumption will keep rising and rising untill there are shortages for all.

And than the war starts.

Wed, 04/30/2014 - 03:35 | 4711065 mla
mla's picture

Not that I really care who wins this pissing match, but we know China GDP is hugely inflated, right? Crazy malinvestment and all that. So do we even know the real size of China's production? (yes, you could say the same about the U.S.).

Wed, 04/30/2014 - 21:53 | 4714604 George Washington
George Washington's picture

Yes, in his Jan. 2011 post, Pettis said BOTH countries are fudging their numbers.

But the point is that it's arguable that China already passed up US ... first time that argument could be made ....

Wed, 04/30/2014 - 21:29 | 4714536 SilverRhino
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Cant have that.  Surprised the CIA isn't working on destabilizing China.

Wed, 04/30/2014 - 08:07 | 4711300 lordbyroniv
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USA  USA USA !!!

 

 

# 2 !!!

 

 

USA !!! 

 

USA !!!

Wed, 04/30/2014 - 06:57 | 4711205 Walt D.
Walt D.'s picture

The thing is that in the US we kn ow for a fact that the GDP numbers are phony. In China we don't really know the extent. We know they count building ghost towns as economic output. (Keynesian economists consider building ghost towns as economic output).

Wed, 04/30/2014 - 12:07 | 4712402 magnetosphere
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well china has a larger share of world trade, energy consumption, machine tool stock, and industrial production

Wed, 04/30/2014 - 07:03 | 4711215 Sudden Debt
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Well, just like in the US, China also has production hub cities.

Almost every production hub city in the US lies in ruins and China has more than any man can count.

Yes production is down but it's still there.

And that's what makes them more stronger in case of a war.

In war, consumer productionplants are turned into warmachines. If wanted, they could produce equipement for war at a terrible rate. What would America do than? Sure, America would have the upperhand at start but what after 1 or 2 years?

Thu, 05/01/2014 - 01:38 | 4715043 Hamsterfist
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You know that the war would never last near that long.

Thu, 05/01/2014 - 01:38 | 4715042 Hamsterfist
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You know that the war would never last near that long.

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