Elizabeth MacDonald at Fox Business News tries to make the case that China’s economy will not pass the US economy on a nominal basis before Dec 31, 2029. She refers to the 2005 cutting of purchasing power parity (PPP) but does not talk about the reversal in the 2011 World Bank statistics. The reason for the cut and adjustment was incorrect and incomplete pricing surveys of only rich cities in 2005. The new 2011 numbers mean that World Bank / IMF PPP have China passing the USA this year.
Population : 1.360 billion (end of 2013, an increase of 6.68 million from 2012)
GDP – 56.7 trillion yuan
6.05 exchange rate at the end of 2013
Urbanization – 53.7 %
At the end of 2013, the number of employed people in China was 769.77 million, and that in urban areas was 382.40 million.
Urban employment increased by 13.1 million.
USD 9.37 trillion nominal at end of 2013. This does not include Hong Kong and Macau (a combined $250 billion at the end of 2013). The end of 2013 number is still USD9.25 trillion based on the current exchange rate.
There was reference to China’s GDP from older IMF forecasts for 2013 was 9.18 trillion. So claims that the IMF projections have China 60% smaller than the US in 2019 have the problem that those figures are working off of an incorrect 2013 number.
Elizabeth MacDonald ends with the per capita income difference and the total wealth difference. This seems to be setting the table for the shift to numbers other than total nominal GDP when China passes on that measure. This is already the case where the PPP GDP pass has to be disparaged.
I think China will pass the US in the 2019-2022 timeframe on a nominal basis. This depends upon the inflation differential, currency appreciation of the yuan and the difference in economic growth. The US economic growth seems likely to be in the 1.5%-2.4% range. China’s economic growth seems like it will be in the 6.0-7.5% range. The Chinese yuan will be relatively stable on an exchange rate basis for 2 years or so but I believe it will strengthen again after that.
I predict China will loosen population controls (one child policy) more and more and will be encouraging birth policies by 2020.