[SetSnonejog]

Markets Hub: IMF Sees China Topping U.S. in 2016 - MarketWatch Video

[mikeydesignzinc]

Except they are building phantom cities, under value their currency, are more heavily hooked on oil...

Their people could rise against them and send them back 50 years.

I'll believe it when I see it.

[resegooredo]

I just read this counterpoint earlier today here

[SoftrermaBioniaSat]

Let's get back to China: On a PPP basis, the IMF says that China's current GDP is about $11.5 trillion while that of the United States is $15.2 trillion. But at current exchange rates, the IMF notes that China's GDP is only $6.5 trillion or a little more than a third the size of the U.S. GDP. That is the more important figure to look at when considering relative international buying power and economic and geo-political influence. The IMF has China passing the U.S. GDP in 2016 on PPP calculations. But on a real exchange rate basis, the IMF numbers show China's 2016 GDP to be only about two thirds that of the United States.

Now, let's add another dash of reality. Those numbers all assume that China's growth rate continues to rise in pretty much a straight line. But maybe it won't. Here are two things to keep in mind. One is that the Chinese population will begin to age rapidly in the next few years and that is likely to have some slowing effect on the GDP. In addition, we must understand that China's growth is extremely investment intensive. Domestic consumption accounts for only about 35-40 percent of GDP.

In recent years, China has been in the situation that it gets less GDP growth-per-dollar or yuan invested each year. So it has to invest more and more each year just to maintain a constant rate of growth. Obviously, this reachs a limit. The entire GDP cannot be invested. The IMF and others assume that China will be able to rebalance its economy and get more growth from domestic consumption while getting a bit less from investment. But the experience of other Asian countries over the past fifty years suggests that this rebalancing is extremely difficult to achieve. Maybe China will prove the exception, but its efforts in this regard so far are not impressive.

from The Economist...

[replicajoy]

I bet this report is accurate give or take a couple of years of course barring any major incidents in China. I would be willing to bet just about everything I have on it. No one can seem to understand China's growth rate because they can't fathom how fast it grows. Aging China is a myth because now the general population of China can afford to have children.

[Toivaluadiora]

China grows because they don't have the same controls and limitation in regards to wages, pollution, hours, everything.

It would be like having a historic district in a city and then you use overlays and site usage controls and fight ever developer. Soon that economy would ground to a halt.

Where other areas of the city or world that lack those controls would flourish and soon leave a controlled "Old" part behind.

But hey... look how all those controls have helped places like Detroit.

[saumemeva]

China won't pass the U.S. anytime soon | Prestowitz

Not really. I wouldn't be so quick to bet everything I owned on this.

...Let's get back to China: On a PPP basis, the IMF says that China's current GDP is about $11.5 trillion while that of the United States is $15.2 trillion. But at current exchange rates, the IMF notes that China's GDP is only $6.5 trillion or a little more than a third the size of the U.S. GDP. That is the more important figure to look at when considering relative international buying power and economic and geo-political influence. The IMF has China passing the U.S. GDP in 2016 on PPP calculations. But on a real exchange rate basis, the IMF numbers show China's 2016 GDP to be only about two thirds that of the United States.

Now, let's add another dash of reality. Those numbers all assume that China's growth rate continues to rise in pretty much a straight line. But maybe it won't. Here are two things to keep in mind. One is that the Chinese population will begin to age rapidly in the next few years and that is likely to have some slowing effect on the GDP. In addition, we must understand that China's growth is extremely investment intensive. Domestic consumption accounts for only about 35-40 percent of GDP.

In recent years, China has been in the situation that it gets less GDP growth-per-dollar or yuan invested each year. So it has to invest more and more each year just to maintain a constant rate of growth. Obviously, this reachs a limit. The entire GDP cannot be invested. The IMF and others assume that China will be able to rebalance its economy and get more growth from domestic consumption while getting a bit less from investment. But the experience of other Asian countries over the past fifty years suggests that this rebalancing is extremely difficult to achieve. Maybe China will prove the exception, but its efforts in this regard so far are not impressive. ... And not only is it an aging population, there aren't enough girls. Too many boys, not enough girls means that even if they have some money to start reproducing, there really aren't enough women to do the job. That is only one of the many negative results of infanticide of girls.

Also, the other country projected to overtake the US within 50 years apparently has the same problem:

...Yet, bad as things are, sex selection may slowly be turning around. Though the sex ratio has been worsening for decades, it is doing so more slowly. The figure in 2001 was 1.9% worse than it had been in 1991. The figure in 2011 was 1.5% worse than in 2001—an improvement of sorts.

Moreover, the ten-year census may not capture what has been happening recently. For that, go to the sample surveys that India carries out more often. These show a different pattern. The figures are not strictly comparable, because sample surveys show the sex ratio at birth, whereas the census gives it among infants up to the age of six. Still, it is significant the sex ratio at birth is improving, not worsening. In 2003-05 the figure was 880 girls born per 1,000 boys. In 2004-06, that had risen to 892 and in 2006-08, to 904. It is not clear why this should be. The samples could be misleading. But perhaps they reveal a recent change in Indian attitudes towards the value of daughters.

The fears about India’s sex ratio are not merely of the harm that today’s level will cause when children become adults. People also worry that the ratio will get ever worse, deteriorating towards Chinese levels (which are even more extreme: on a comparable basis, China’s sex ratio at birth is about 833). This fear, thinks Monica Das Gupta of the World Bank, may be exaggerated. Not only are there signs of an incipient national turnaround, but regional figures give further reasons for hope. The states with the worst ratios, Haryana and Punjab, seem to have had skewed ratios for decades, going back to the 1880s. They now show some of the biggest improvements.

The national average is worsening thanks to states which once were more neutral with regard to sex, such as Tamil Nadu and Orissa. But because they have not had the historical experience of a strong preference for sons, Ms Das Gupta suggests, they also seem less likely to push the sex ratio to the extremes that it reached in Punjab or China. If so, the next census in 2021 could show the beginnings of a shift towards normality. With luck, the deterioration in north-east and central India—damaging though it will certainly be—may not mark the start of a fresh erosion in the value of Indian girls. When either of these countries do take us over, it will be longer than the timeline in the OP's article, and China's time won't be nearly as long as you will imagine, since India should be poised to overtake them relatively soon.