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It happened sooner than expected. Must have been our "great recovery" that pushed this.
http://finance.yahoo.com/news/offici...150936444.html
We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.
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This is a geopolitical earthquake with a high reading on the Richter scale. Throughout history, political and military power have always depended on economic power. Britain was the workshop of the world before she ruled the waves. And it was Britain’s relative economic decline that preceded the collapse of her power.
And it was a similar story with previous hegemonic powers such as France and Spain.
Well, what's so surprising about it? As you point out, super-power status of countries has shifted throughout history. The U.S. is just another country.
We are still winning by a long-shot in nominal GDP. You are referring to GDP (PPP), which takes into account the cost of living of each country. Poorer countries, like China, skew toward higher PPP while developed countries, like the US, skew toward nominal.
PPP is generally very useful for discussing per capita values. We're looking at the individual in that case, in which buying power matters. For looking at the whole economy, and determining exactly how much a country produces, nominal is the preferred measure.
That's why this hasn't been huge news. It really isn't that significant. In fact, it wouldn't be that significant even if we were passed in nominal GDP. I'm more worried about what my quality of life is than chasing ranking spots. I think most of us can agree that life in the US is better than life in China (for the common person at least).
You mean China is returning to its historical position as the richest country on Earth since collapse of the Roman Empire? Shock and horror I tell you.
US counts the debt unpaid against its GDP. China is underpinned by the assumption that all debt will be paid by government, mostly does not.
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