US Economy Over 50% Larger Than China’s

The truth is that China has always been weak, even if its outward behavior is aggressive, even obnoxious. But beneath the confident exterior is a nation that still cannot feed itself, lacks stable sources of energy and is addicted to using debt to spur short-term economic growth. As Chinese in Hong Kong and other parts of China demand greater openness and accountability, the grip on power of the Chinese Communist Party is weakening. In order to retain power, Xi Jinping must be ready to use even harsher authoritarian methods, a path that will ultimately lead to his destruction. __ Xi’s End Game?

IMF projection for 2021

How to Compare National Economies for Geopolitical Impact

Is it best to use GDP by exchange rates, PPP per capita GDP, or another metric?

The obvious solution is to use the contemporaneous exchange rate: multiply China’s renminbi-measured GDP by the dollar-per-RMB exchange rate, so that it is expressed in dollars. Viewed in these terms, the US economy ($19.519 trillion) is still over 50% larger than China’s ($12.144 trillion), according to the latest figures. _PS

Why Not Use PPP GDP to Compare Nations?

The PPP measure has many uses, but assessing geopolitical power is not one of them. It is not helpful in answering the primary question that most commentators fixate on: how China’s economic size and power compare to America’s in the broader contest for global supremacy.

… For these and other geopolitical questions, it is more useful to rely on China’s GDP at current exchange rates. The issue isn’t how many haircuts Chinese consumers can buy, but what the RMB can buy on world markets. _PS

When comparing PPP GDP per capita, China’s economy falls behind Mexico, Argentina, and other much smaller nations. The only metrics where China ranks highest is on the propaganda and belligerence scales — where only Russia even comes close. It is always best to recall that virtually all of China’s wealth is in the hands of top CCP officials and their close families and friends. So even China’s anemic PPP GDP per capita is a gross overestimate of prosperity inside mainland China.

And China is likely to continue on the decline, unless Beijing can somehow get someone like Joe Biden elected as US President.

While previous U.S. administrations were bowing to Chinese demands, President Trump was warning us about the risks to our national security of having China be the world’s leading manufacturer.

… the Chinese economy had been reeling long before the coronavirus emerged in Wuhan. Last year, China’s economy grew at its slowest pace in nearly 30 years, with industrial output and retail sales losing their luster.

Trump has been working on this problem for a while, and is likely to oversee a continued slow decoupling from China, if given yet more time. India may become a major beneficiary.

The immediate effects of decoupling from China may perpetuate the outsourcing of American industry. India’s overseas missions have contacted more than a thousand US companies and offered incentives for transferring production out of China, with medical equipment, food-processing units, textiles, leather and auto parts high on the list. The Modi government offers cheap land for factories and changes to India’s tax and labor laws. India offers more reliable supply chains but higher production costs. These would be offset if the Trump administration further raised tariffs on imports from China. And that might set America’s outsourced economy on a newly sustainable footing. __

Xi Made His Move Too Soon

Like Putin before him, Xi moved aggressively against other nations much sooner than the substructures of his own country had been prepared for. As a result, China is generating massive international ill will AND internal turmoil that will inevitably rebound onto its economic future.

The COVID-19 disaster combined with the explosive Hong Kong fiasco, tensions with Taiwan, the China Seas belligerency, and the Xinjiang mishap only add to the growing toll from China’s incompetent dealings both within and without the bamboo prison state. Keep in mind that Tibet is always a ticking time bomb.

The China Seas misadventures demonstrate convincingly that mainland China is not nearly as prepared for future sea warfare as its near neighbors, much less as the US. The house of China cards is none too steady. If China survives a clash with its neighbors — Hong Kong, Taiwan, Japan, etc. — it will have to deal with a larger world that has taken just about enough of Beijing’s abuse.


China’s position in U.S. trade has retreated as nations like Mexico and Vietnam have gained. Mexico is now America’s largest trading partner and Vietnam has risen to 11th, reports Qian Wang of Bloomberg News. Meanwhile, China has dropped from 21 percent of U.S. trade in 2018 to just 18 percent last year. A big part of the shift is due to the U.S.-Mexico-Canada trade pact, which is expected to accelerate a return of production to North America. Sourcing for everything from autos to semiconductors is expected to rotate away from China in coming years. __

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2 Responses to US Economy Over 50% Larger Than China’s

  1. Truthfully it doesn’t matter who is elected president. Both Republican AND Democrat voters are done with China AND their shills’ bullshit. If their representatives aren’t anti-China yet they soon will be. If you have money in China get it out now, if you can.

  2. matthewpmusson says:

    Both parties are feigning outrage. But, the deep staters like Biden and Burr and Feinstein are still on the CCP payroll.

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