The big news to come out this past Monday morning, Beijing time, was that
China's economy skipped past Japan's in the second quarter, becoming the world's second largest. The Japanese economy is valued at about $1.28 trillion, slightly below China's figure of $1.33 trillion. The gross domestic product of the United States was roughly $3.5T for the quarter.
These numbers are subject to interpretation however, for example if you adjusted China’s currency up 40% to bring it in line with the USD it would put their GDP at about 2.5T and you knock about 20% off the US economy for the non productive financial services industry that brings the US down to 2.8 T. That still leaves the US ahead of China but not by much, consumer spending in China only accounts for 35% of their economy
and with 70% of the US economy based on giving each other haircuts and serving fries with that, is the US still ahead?
China does have perhaps four times the population of the US so you could still say it’s comparing apples and mandarin oranges since they have some 700 million people still living in abject poverty. The poor in China have one thing the poor in the US don’t have, real hope for the future. China creates new middle class people by the millions every year, the US is creating new poor people by the millions. China is creating new millionaires everyday, the US is making billionaires richer as they create new poor people.
China is building skyscrapers at such a rate that it has half of all the tall construction cranes in the entire world and consume 40% of the all world’s steel and concrete each year. They are building major projects bigger than anything the US has ever done even before Reagan took the economy off line. It took China just three years to build a 230 mph bullet train the equivalent of the distance from New York to Chicago. Obama barely got funding through Congress to start building what he calls a high speed train running from Chicago to St. Louis (a fraction of the distance) that might reach 90 mph, a train speed not seen in the US since, (wait for it) 1950.
There are few economists anymore that don’t see China passing the US to become the dominate super power, they just can’t agree on the time required. The popular press likes the twenty year estimate but some say just ten years and others point out China will begin its twelfth five year plan next year and they will probably set goals that will put them ahead of the US. This is without taking into account how far the US will have declined by then.