China Stumbles in Race to Pass U.S. as World's Biggest Economy

[F-22Raptor]

For the first time in almost a decade, China has lost ground in catching up with the U.S. economy, when output is measured in dollars.

U.S. gross domestic product increased $590 billion in 2015 from a year earlier, according to data released Friday. China’s economy, while reporting 6.9 percent growth for the year, added $439 billion, as a weaker yuan sapped the value of output gains in dollar terms, according to data compiled by Bloomberg.

“The U.S. has come back from the financial crisis with robust technology innovation leading the recovery, while China’s economy is heading down,” said Niu Jun, an international-relations professor at Peking University. “The number itself isn’t a specific reason for being either too optimistic or pessimistic, but if China can’t successfully reform its economy, the real gap between the two will expand, and it will take longer for China to catch up.”

Last year was the first time since 2006 that China made no progress in closing the gap with the world’s largest economy. While the U.S. economy expanded 2.4 percent for a second straight year, China slowed to the weakest expansion pace in a quarter-century as old growth drivers like heavy industry and exports slow.

As for 2016, China’s economy is forecast to expand 6.5 percent in real terms, while the yuan is projected to depreciate to 6.79 against the dollar, down more than 7 percent from the average level in 2015.

“Whether China can catch up the U.S. in dollar terms is not important, but whether China can sustain its development is,” said Xia Le, a Hong Kong-based economist at Banco Bilbao Vizcaya Argentaria SA. “As long as China can expand 5 percent a year in the next decade, it’s only a matter of time until it surpassed the U.S.”

http://www.bloomberg.com/news/artic...n-race-to-pass-u-s-as-world-s-biggest-economy

 

[Ewok6102]

Back in 2009 China was closing in on the world's second largest economy at the time (Japan). Today we are several times larger than them already. So sensationalism aside, we shall see in a few years time where we stand. Since the American and other western media are so concerned about our economy, I'd say we are far from collapse. Our dear friend, Gordon, will think otherwise.

 

[nang2]

I am more concerned with per-capita number, which has a LONG way to go before catching up with US.

 

[vietnamera]

USA 2015 current dollar GDP increased 3.4 percent, or $589.8 billion, in 2015 to a level of $17,937.8 billion, compared with an increase of 4.1 percent, or $684.9 billion, in 2014.

China 2015 GDP is $10866.9 billion increased $514.85 billion, which means China lags behind USA by GDP increase.

$514.85 < $589.8

http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm

 

[Ewok6102]

America is not only rich in GDP, they are also rich in debt. Hence the need for an gold inspection and call to repatriate gold by its allies was understandable.

 

[EAsian]

The Great US depression.

 

[Economic superpower]

Chinese currency will appreciate over the next 5 years which will close the nominal GDP gap between US and China.

But for me the most important gap China needs to close is the technology gap between the two countries.

 

[Dungeness]

In 1955, Chairman Mao said it would take 75 years to catch up with USA. So China still has 14 years before 2030.

 

[Aepsilons]

I am more concerned with per-capita number, which has a LONG way to go before catching up with US.

Ultimately this is the long term goal. Even in terms of catching up to Taiwan's GDP per capita and sovereign wealth per capita would be a practical and logistical goal for Beijing. Work hard, brothers. Surely you guys can attain it. Remember even the Great Wall was not built in a day or in a decade, but over a course of several Dynasties !

Excellence , afterall, is not a trait, but , rather, is a habit.

Regards.

 

[Keel]

America is not only rich in GDP, they are also rich in debt. Hence the need for an gold inspection and call to repatriate gold by its allies was understandable.

Yup
Need to have surprise checking on the usa from time to time
Here is what the Gemans have done:

Wed Jan 27, 2016 4:27pm GMT
In uncertain times, Germany takes more gold home
FRANKFURT | BY JOHN O'DONNELL

Gold bars are stacked at a safe deposit room of the ProAurum gold house in Munich March 6, 2014.
REUTERS/MICHAEL DALDER

Germany's Bundesbank took more than 200 tonnes of its gold back to Frankfurt from overseas last year, the central bank said on Wednesday, as it moves toward hoarding half of the world's second-largest reserve at home.

In the wake of the euro zone crisis, many ordinary Germans want to see more of the 3,381 tonnes of gold in vaults at home and some have even questioned whether it still exists, prompting the Bundesbank to recently publish a long list of gold bars.

Just over 40 percent of the reserve, which Germany started building in the post-war boom years, is now held underground at the Bundesbank in Frankfurt, while almost the same amount is stored at the Federal Reserve in the United States.

Holding gold reserves abroad is a legacy of the Bretton Woods system of currency management established after World War Two. Much of the precious metal stayed there during the Cold War, when the former Soviet Union occupied eastern Germany.

As well as the reserves in the United States another 400 tonnes of German gold are held by the Bank of England. London and New York are centers for gold trading as well as home to two global currencies and - in an emergency - gold stored at those centers could be converted into sterling or dollars.

France, Germany's closest political ally in the euro zone, keeps less than half the amount stored in London and will have none at all by 2020 when half of the overall reserve will be guarded in Germany's financial center.

The impact of the global financial crisis has been mild in Germany compared with other European countries but many Germans are suspicious of the euro project after an economic crisis almost fractured the currency, used by 19 European countries.

In uncertain times, gold is considered a safe asset, even though its value has recently fallen.

Proof that it is still in safe hands is important for many Germans. The Bundesbank said all gold bars are "thoroughly and exhaustively inspected and verified" on arrival.

Germany's gold holding, which is valued at roughly $130 billion, is the second biggest in the world, after the United States. The German reserve is roughly twice that of China, according to the World Gold Council, an industry body.

(Reporting by John O'Donnell; Editing by Dominic Evans)

http://uk.reuters.com/article/us-germany-bundesbank-gold-idUKKCN0V5252
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