Nothing more than a wild dream?

In our nanotechnology scenario #8, "Newshound Notebook," composed by members of the CRN Task Force, we write:

24 Jun 2013 - China’s economic growth continues to astound. I just checked with the Hypernet for earlier forecasts, and it turns out that a few years ago (in 2007), people were predicting that China would exceed the U.S. as the world’s #1 economy by around 2025. Now, the common wisdom is that it will happen no later than 2018. Amazing!

Note that this was prepared well before the current economic crisis, which has the U.S. economy taking a serious hit.

However, Stephen Aguilar-Millan, our colleague who writes The Futurist -- a must-read blog for anyone looking ahead -- has performed an interesting analysis that concludes it is highly unlikely for China to surpass the U.S. in GDP at any time before the mid-2020s.

I encourage you to read Stephen's entire article and review his statistics; both very enlightening. He concludes:

We can see that the forecast of 2015 as the point where China’s GDP overtakes America’s GDP is nothing more than a wild dream.

Mike Treder

Comments

[Brian Wang]

The exchange rate is the key factor in an accelerated China passing the USA in GDP.

Here are how the numbers would work from a May projection. Note: that China has held its exchange rate steady for three months.

Also, China is undergoing a new statistical census. If the numbers match the city and regional numbers then the national GDP growth could be underestimating the GDP by 3-4% per year as it did in the last statistical census.

In 2008 and 2009, it looks like the US is heading for zero to negative 2-3% growth and China is going to 8-9%.

[Brian Wang]

Futurists quotes Economist 2007 figures of US GDP 12.7 trillion and China GDP 2.2 trillion.

BEA.gov has Q2 2008 US GDP 14.3 trillion.
China GDP for 2008 is 27 trillion yuan. At 6.82 exchange rate China's GDP (not including Hong Kong and Macau) is $3.95 trillion.

If China was following the 2007 numbers its GDP would be about $2.5 trillion in terms of a ratio that is in line with $14.3 trillion for the USA.

The Economist is projecting Cnhina's GDP growth rate at about 8.5% and the US after 2009 at about 2.5%. Both are until 2013.

The Economist is projecting China's currency to appreciate to 6.25 to the US $ in 2013. This is a slower appreciation projection than most other sources.

[Brian Wang]

His figures from 2007 Economist
$12.4 trillion US
$2.2 trillion China
China was 17% of US economu

BEA.gov (official US stats) $14.3 trillion
China $3.95 trillion.
China is 27.6 %

Hong Kong $300 billion
Macau $13 billion

China + Hong Kong and MAcau (which were returned to China) $4.27 trillion
china+Hk+Macua is 29.9%

China's currency is arguably 20-40% undervalued now.
China's statistics according to the Economist could still be understating the size of the economy by 5-10%. Current economic census would give a better indication.