Commentary: China’s economy will surpass the U.S. in 2016
The International Monetary Fund has just dropped a bombshell, and nobody noticed.
For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.
And it’s a lot closer than you may think.
According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.
Put that in your calendar.
It provides a painful context for the budget wrangling taking place in Washington, D.C., right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s hegemonic power.
According to the IMF forecast, whomever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy.
Most people aren’t prepared for this. They aren’t even aware it’s that close. Listen to experts of various stripes, and they will tell you this moment is decades away. The most bearish will put the figure in the mid-2020s.
But they’re miscounting. They’re only comparing the gross domestic products of the two countries using current exchange rates.
That’s a largely meaningless comparison in real terms. Exchange rates change quickly. And China’s exchange rates are phony. China artificially undervalues its currency, the renminbi, through massive intervention in the markets.
The comparison that really matters
The IMF in its analysis looks beyond exchange rates to the true, real terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies.
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...
Read more:
http://www.marketwatch.com/story/imf-bombshell-age-of-america-about-to-end-2011-04-25?link=MW_home_latest_news
The reality of the global (ponzy)capitalism system will always be imbalance,exploitation and rotational and regional poverty. It seems like the US and europe will become third world countries, just like the ones they have expoited and suppressed through the IMF and World Bank policies. Sadly the reality is down to pure maths ...a finite level of resources and opportunity verses a global population of hungry desperate competition, The rich 10% cream 80% then it's pretty obvious whats left for the rest of us to fight over. But of course we are all blind happy selfish fools when things are going good and favouring us personally, but blind and angry when it doesn't. Will we ever wake up to this fundemental truth... I doubt it, cos war and division makes us all richer right???? I wonder who will be throwing us the bones in the futres New World Order. Also are Apple and GE American now or where they forced to go and get things made in China and abroad? They don't seem to like employing Americans or making things there anymore,or paying their taxes. Good US brands for the loyal consumers and shareholder although again, I often wonder who they are?
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