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The IMF says predictions of China's economy overtaking the U.S. as more than a decade away are...

The IMF says predictions of China's economy overtaking the U.S. as more than a decade away are mistaken. By adjusting for a more realistic value of the yuan, the shift will come in 2016. Whoever gets elected President in 2012 "will be the last to preside over the world’s largest economy," writes Brett Arends.
Comments (7)
  • bbro
    , contributor
    Comments (10417) | Send Message
    Under PPP...not nominal figures but it makes for a good story eh???
    U.S. is 43% of the worlds military expenditures....China is 7%,,,then
    comes Great Britain at 4%,,,,
    25 Apr 2011, 08:04 AM Reply Like
  • youngman442002
    , contributor
    Comments (5131) | Send Message
    I think it could be faster....the way the dollar is could be this year...
    25 Apr 2011, 08:24 AM Reply Like
  • rothyman
    , contributor
    Comments (126) | Send Message
    Please, I'd like to hear a more near-sighted prediction. lol
    27 Apr 2011, 02:26 AM Reply Like
  • Old Trader
    , contributor
    Comments (5726) | Send Message
    Brett Arends offers up a good rebuttal on MarketWatch, for those interested. (He questions the methodology used).
    26 Apr 2011, 07:03 PM Reply Like
  • Ricard
    , contributor
    Comments (3829) | Send Message
    Arends's commentary is excellent, as usual.


    "The last time the world’s dominant hegemon lost its ability to run things singlehandedly was early in the past century. That’s when the U.S. and Germany surpassed Great Britain. It didn’t turn out well."


    He gets it.


    The IBD commentary isn't bad either:


    "But real wealth and productivity are measured on a per-person basis. And based on that, China won't catch the U.S. anytime soon. In fact, it may never catch us."


    Lot of truth to this.


    "This is important, because per-capita GDP is a rough proxy for productivity. "


    Not too sure about this. GDP could be inflated by selling Gucci handbags instead of the Walmart variety. It's a lot more than just productivity.
    26 Apr 2011, 07:59 PM Reply Like
  • Tom Au, CFA
    , contributor
    Comments (6783) | Send Message
    The IMF has a point that holds IF you use purchasing power parity theory (or assume that exchange rates will by 2016).


    But purchasing power parity only applies to traded goods. America has, and will still have, the largest non-traded goods sector, hence the larger economy in 2016.
    27 Apr 2011, 07:38 PM Reply Like
  • Trever99
    , contributor
    Comments (105) | Send Message
    well.. it's likely that the oriental economies.. china and india specifically will continue to grow and will eventually catch the US. But I don't think it'll be a huge power shift..


    It will be the end of unilateralism.. that is for sure.
    26 Apr 2011, 11:12 PM Reply Like
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