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Posted at 11:25 AM ET, 01/18/2011

Is China already the world's No. 1 economy?

By Ariana Eunjung Cha

The Peterson Institute's Arvind Subramanian argues in a paper released last week that when the presidents of China and the United States meet in Washington "neither will likely be aware that, measured in terms of purchasing power, it is Hu Jintao not Barack Obama who represents the world's largest economy."

He said that his calculations show that the size of the Chinese economy in 2010 was about $14.8 trillion dollars while that of the U.S. economy was $14.6 trillion if you account for the different costs of living in the countries.

The International Monetary Fund, on the other hand, estimates that the GDP of the U.S. was $14.6 trillion last year as compared to $10.1 trillion for China. The World Bank estimates that the U.S. economy was $14.2 trillion versus $9.1 trillion for China.

While Subramanian's paper is likely to lead to heated argument among economists, many agree that even if China didn't make it to the No. 1 spot last year it will get there soon.

By Ariana Eunjung Cha  | January 18, 2011; 11:25 AM ET
Categories:  China  
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Comments

China's economy is overheated and the real question is--is it sustainable....

Look to Chinese nationalism versus China's economy as the next issue facing the world...

Posted by: Anonymous | January 18, 2011 12:24 PM | Report abuse

What? Nothing from you blowhards about this one? Take your breath away?

Posted by: itsme12 | January 18, 2011 12:28 PM | Report abuse

China can make it and ship it for less than anyone else can make it themselves, regardless of whatever "it" is.

Posted by: blasmaic | January 18, 2011 12:42 PM | Report abuse

Yet another example of why dubya will go down in history as our worst president. He came into office at a time when the US was preeminant, dominanat, and for the most part enjoying the good will of the world. We were in an even better position internationally after the heinous acts of terrorism on 9/1/2001.

And instead of capitalising in any way shape or form dubya and his republicon cave dwellers used that moment of prime opportunity to pursue the Iraqnam disaster, a disasterous economic policy, and ignored the underlying problems the nation faced.

So here we are -- a decade later -- and instead of the US being in a golden position of world leadership we are in danger of falling behind a nation that until 20 years ago was a third world dirt poor communist sh i t hole.

Posted by: Anonymous | January 18, 2011 12:43 PM | Report abuse

We are borrowing from China and they lend $ money to everyone else. Is there any confusion who is richer, the lender or borrower?

China always take care of their businesses first. US always take care of other first. With this kind of idiotic policy, what is the chance China will be #1 economy in matter of time? About 100%.

Posted by: Anonymous | January 18, 2011 1:29 PM | Report abuse

The U.S. can't afford to adventure around the world anymore, nor protect the Koreans, the Japanese, etc., let alone keep wars going in Afghanistan, and Iraq.

We may be in hock to the Chinese, but on the other hand, they would have a hard time collecting their money as the U.S. can't exactly pay!

Posted by: Hu Jin Tao | January 18, 2011 2:10 PM | Report abuse

Wait this cant be news while the GOP is busy putting on its kowtowing Health Care charade to the tea party.

The GOP is the party of imbeciles who think Faux news is Facts News.

Americans owe China $14,000,000,000.00 while the US Government continues to spends $1,000,000,000.00 a year on defense and wars. Yet the GOP is "busy" debating the Health Care Bill.......

REAL Patriots don't listen to Faux News.... Rupert Murdoch isn't even a natural-born American Citizen, but who here is asking for his birth certificate.

Posted by: waxtraxs | January 18, 2011 2:12 PM | Report abuse

Of course China is the world's no. 1 economy...thanks to the United States.

Posted by: Anonymous | January 18, 2011 2:17 PM | Report abuse

From each foreign brand/foreign-owned/China registered product only 5 cents remain in China. And 95 go to an owner.
It was in one of WaPo articles.
So it appears to be misleading: they manufacture a lot - but not that much remains in China.
I can't figure how it is accounted?
Sure China is on the rise. But all indicators should be measured separately.

Posted by: Anonymous | January 18, 2011 2:24 PM | Report abuse

In the 1980's, it was Japan bashing and now it is China bashing. When would the Americans learn that it is not the outside factors that caused their decline but the inside factors, such as a stupid GW Bush and the Repuk and their wars, corruption spending on their favourite cronies.

China did not cause USA to go bankrupt, Wall Street "free market" greed and their Repuk's "no tax, big spending, no health care" policy did all that. So you don't have money, who do you approach to buy your bonds? the European? they are bankrupt too!! You have no choice but the Chinese, the Japanese and the Korean and for some reason they think you are "stable". If they know you are not, do you think they will buy your bonds so that you can live a lifestyle that you are enjoying??

Quit thinking there is someone to bash or blame. Save more and spend less and curb your stupid exhobitant life style and amybe, USA can come out ahead like the Asians or Chinese did after the 1994 Asian Financial Crisis.

Posted by: Anonymous | January 18, 2011 2:35 PM | Report abuse

Jealous are we? Maybe we should devalue the dollar. You know; a little currency manipulation like China does. That would knock them way out of the number one spot and would WAY reduce our deficit as well.

Posted by: Anonymous | January 18, 2011 2:38 PM | Report abuse

GDP really isn't the only measure of a country's "power".
Per Capita, China's GDP (nominal) is only $4,280 USD. The US: $46,381.
How can you put a country "ahead" when its people are living in poverty and its social and environmental policies are from the 19th century?

Posted by: Mr_M | January 18, 2011 3:28 PM | Report abuse

But the Chinese don't have 700 bases around the world, a couple of wars cookin' or a deficit of $1.3 trillion. How can they possibly be #1?

Posted by: Anonymous | January 18, 2011 3:29 PM | Report abuse

How can this topic be intelligently discussed when you have anonymous on January 18, 2011 12:43 PM falsely blaming (where are the facts?) President Bush for everything. You are so far from the reality of the situation with China it is sad.

Then you have waxtraxs on January 18, 2011 2:12 PM who claims all the news on Fox is not true. He obviously hasn't looked at their website. waxtraxs, if you can stop taking pictures at Tea Party folks and yelling "you die" for one second, I ask you to show me just one, only one, article from Fox that is not true. Please, we all want to see. Please. Show us. We are waiting...

Posted by: Anonymous | January 18, 2011 3:30 PM | Report abuse

So you think devaluation of US dollars will be good? Our buying power will be less and inported goods will be expensive, i.e. big inflation. Also, we will not be able to enjoy our current standard of life... We will be poor. Got it??

Posted by: Anonymous | January 18, 2011 3:33 PM | Report abuse

Why all this angst about China passing the U.S. as the world's biggest economy? It has about 4 times as many people. It has made amazing strides but still lags far behind the U.S. on a per capita basis.

The world economy is not a zero sum game. China getting richer does not mean we grow poorer. We can both get richer together.

Posted by: Anonymous | January 18, 2011 4:05 PM | Report abuse

China is not No 1 Economy its all propaganda they have way too many poor to admit this lie on high!

Posted by: JWTX | January 18, 2011 4:05 PM | Report abuse

Well their steel production is 10x that of the US, ditto for their cement production. Their energy consumption is larger than the US too. So their economy may be larger, even substantially so, already.

Posted by: Anonymous | January 18, 2011 4:15 PM | Report abuse

You are kidding with bashing the GOP with Health Care overhaul right? You think this crap wasn't going on when the Dems were shoving it down our throats? The hypocracy is amazing!

The Health Care bill is a job and economy killer and a debt raiser. It needs to be thrown out.

Posted by: Anonymous | January 18, 2011 4:24 PM | Report abuse

TO: Anonymous | January 18, 2011 3:33 PM

NOT exactly. Devaluation will initially affect buying power and make imported goods expensive. But it will also make domestic goods more competitive. People would opt for quality US made products than cheaply made Chinese goods. Manufacturing base will start to ramp up production and will create more new jobs and eventually return to the prosperity that we have been yearning for a long long time! Note that we still need to live within our means and stop competing with the Joneses if we are to thrive as a prosperous nation.

Posted by: Anonymous | January 18, 2011 4:50 PM | Report abuse

We'll BHO already has the brown-nose so no further training is required to do what his Asian masters say.

Amazing how far BHO has destroyed this country in just a few short years.

That TV ad showing China in the future 'owning' USA has almost come true.

Two more yrs of the Muslim in the WH, and we'll never recognize this country.

Posted by: warlock3310 | January 18, 2011 5:05 PM | Report abuse

We still have the best football teams.

Go Bears!

Posted by: camasca | January 18, 2011 5:27 PM | Report abuse

America Must Come First, We will not rebuild China on the backs of American Industry and Workers.

This week the President of China will be welcomed by American political leaders and a President that just doesn't get it. We are rebuilding China and much of Asia by eliminating American jobs, taxing unmercifully U.S. businesses while chinese currency is manipulated and Americans can neither borrow money or compete in the export arena. With 15 to 20 percent of the American labor force no longer working, and Chinese enjoying their wealth without a whimper from Congress or the President, our standard of living falls daily.

We must lower state and federal taxes on U.S. companies and increase import fees on all Chinese products. We must replace lobbyists with the American people when it comes to listening and acting. We must demand quid pro quo international markets and reevauate our obligations fiscally to China based on a hard hitting formula which subtracts from our fiscal debt obligations, manipulated yuans and other pretend currency.

We are focused on the military conflicts and wars internationally while the real war for jobs and income continues sponsored by China and others. We Republicans must stop playing footsie with these Chinese autocrats and do it soon.It's all about jobs, I want at least 20 million created soon.

Dr. Alan Phillips
Bloomington

Posted by: Anonymous | January 18, 2011 6:25 PM | Report abuse

hi

Posted by: Anonymous | January 18, 2011 6:47 PM | Report abuse

Ariana Eunjung Cha - You may want to double check your IMF and World Bank figures for China's GDP or otherwise provide clarification on what those numbers reflect. While you report that the IMF estimates China's GDP to be $10.1 trillion for 2010, the very study central to your article, the Subramanian paper, noted that the most recent IMF estimate for China's 2010 GDP is $5.7 trillion (US). Furthermore, while you claim the World Bank's GDP figures for China in 2010 total $9.1 trillion (US), the most recent year's data available on the World Bank website indicates that China's 2009 GDP totaled $5 trillion (US). It's highly unlikely that the World Bank has reported that China's GDP rose 80% in one year to over $9 trillion. Meanwhile, China itself maintains its 2010 GDP was $5.9 trillion (US). Nonetheless, these corrected figures do not discount the paper at the core of your article and its suggestion that China's GDP by PPP exceeds that of the U.S. Thanks for bringing Subramanian's work to readers' attention, which can then be debated on its merits.

Posted by: DC via MI | January 18, 2011 7:26 PM | Report abuse

Ms. Cha's assertion that China will soon be the world's biggest economy at the end of this blurb reveals her bias.

PPP is not an international measure of economic strength, for good reason. China needs to import everything from oil to copper to iron ore to maintain its growth. It cannot purchase these crucial inputs using purchasing power parity, it must use currency traded on international exchanges, e.g. dollars or euros. For goods or labor inside China, the PPP rate has some meaning. As an international comparison, it is meaningless. This is a piece of Chinese government propaganda, nothing more. China depends completely on exports to Europe and America -- if we shut those down, or even curb them to fair trade standards, China's "economic miracle" collapses. Ms. Cha should take a university-level course or two in economics. As for Subramanian, he's way off course with this provocative argument, which was probably made simply to draw attention to himself.

Posted by: JohnRobertsFreeingTibet | January 18, 2011 8:24 PM | Report abuse

SO WHAT if they are the world's "no. 1" economy? None of us would rather live there than here.

Posted by: cmecyclist | January 18, 2011 10:09 PM | Report abuse

These are the same stories we were told about Japan in 1986.

Posted by: kesac | January 18, 2011 10:21 PM | Report abuse

If you change the question to "Is America the biggest manufacturer of BS artists/jealous freaks/kwok zucking kwok zuckers?". The answer is absolutely yes. It manufactured BS artists/kwok zucking kwok zuckers such as JohnRobertsFreeingTibet, the typical American made kwok zucking kwok zucker who loves zucking Dalying Lama's stinky kwok. The funny thing is that this kwok zucking kwok zucker continues his BS about China invading Tibet which is a province of China while he himself continues being trash occupying the Native American land.

Posted by: Maersk | January 18, 2011 10:33 PM | Report abuse

To the average Chinese, he does not care whether China is #1, #2, or #15. All he care is China is getting better day by day.

Posted by: Benkgee | January 18, 2011 11:18 PM | Report abuse

Does China infact have more poor citizens than the US? We have added well over 20,000,000 over the last year and a half thanks to Greedy US Corporations! The Chinese poor actually have it better than our poor here in America because they can live in shanties and huts and survive on their own, but here in America we can't do that because what isn't private property here is owned by the Government, so we can't just construct a shanty town or Tent city and survive as a group, instead we would get put in jail for trespassing and vegrancy. Wait, thats right the guy who was running for Governor in New York suggested putting us all in prisons that have been shut down, there ya go... Welcome to the new FASCIST Amerika.

Posted by: mpbutlersr50 | January 25, 2011 12:24 PM | Report abuse

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