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Save the date

Dec 16th 2010, 12:31 by P.W. and D.H.

We invite you to predict when China will overtake America

CHINA jumped ahead of Japan in 2010 to become the world’s second-biggest economy, but when will it grab the number-one slot? The Economist’s interactive chart allows you to make your own predictions. The relative paths of GDP in dollar terms in China and America depend not only on real growth rates but also on inflation and the yuan’s exchange rate against the dollar. Over the past decade real GDP growth averaged 10.5% a year in China and 1.7% in America; inflation averaged 3.8% and 2.2% respectively. Since Beijing scrapped its dollar peg in 2005, the yuan has risen by an annual average of 4.2%. Our best guess for the next decade is that annual real GDP growth averages 7.75% in China and 2.5% in America, inflation rates average 4% and 1.5%, and the yuan appreciates by 3% a year. Plug in these numbers and China will overtake America in 2019. But if China’s real growth rate slows to an annual average of only 5%, then (leaving the other assumptions unchanged) China would become number one in 2022. Please place your own bets.

 

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Brookse wrote:
Dec 16th 2010 3:17 GMT

Prediction: China overtakes the US in 2021.

The US responds by annexing Mexico and Canada, with strong "political ties" to Central and South America, and calls itself "Oceania".

China responds by annexing SE Asia, with strong "polical ties" to South Asia, and the Middle East, calling itself "Eastasia".

Europe and Russia create a strong political bond, with strong "political ties" to Africa, and calles itself "Eurasia".

Wait, I think I've heard this before:

http://en.wikipedia.org/wiki/1984_book

iewgnem wrote:
Dec 17th 2010 5:22 GMT

I think the elephant in the room is whether or not the USD will still be used to measure GDP in 10 years time.

Endema wrote:
Dec 17th 2010 5:20 GMT

Could we please have a similar chart including also India and the EU if possible? Thank you.

wikilearn wrote:
Dec 18th 2010 10:52 GMT

If the US does not improve local economy; I guess China will catch up in 2017. China will trades more with Asia, and also EU will invests more in Asia. US corporations will produce goods in Asia or whereever the cheapest labor costs, unemployments remain high.
The US government must overhaul political economic structure,and reengineer education system.

1-4 of 4

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