Monday, December 8, 2014

Economic War Of The Pacific - 4

China is Now Number One
I began this series in October of 2009, wondering how seriously "it" would be taken.

Economists are considered by many to be aliens from way out there somewhere (Economists - Aliens From Cygnus?).

So, not many people in the U.S. considered China (as we once did Japan) seriously, even as the nation of China was taking "it" seriously, but now that "it" has happened years earlier than had been expected, "it" may now be considered serious business:
Hang on to your hats, America.

And throw away that big, fat styrofoam finger while you’re about it.

There’s no easy way to say this, so I’ll just say it: We’re no longer No. 1. Today, we’re No. 2. Yes, it’s official. The Chinese economy just overtook the United States economy to become the largest in the world. For the first time since Ulysses S. Grant was president, America is not the leading economic power on the planet.

It just happened — and almost nobody noticed.

The International Monetary Fund recently released the latest numbers for the world economy. And when you measure national economic output in “real” terms of goods and services, China will this year produce $17.6 trillion — compared with $17.4 trillion for the U.S.A.

As recently as 2000, we produced nearly three times as much as the Chinese.

To put the numbers slightly differently, China now accounts for 16.5% of the global economy when measured in real purchasing-power terms, compared with 16.3% for the U.S.

This latest economic earthquake follows the development last year when China surpassed the U.S. for the first time in terms of global trade.
(It’s Official: America is Now No. 2, emphasis added). In 2009, five years ago, when the U.S. was well ahead, I wrote:
[Lee Yew] predicted that the U.S. is on its way to losing dominance in the Pacific, where according to Yew, the economic game of the future will take place:
“The 21st century will be a contest for supremacy in the Pacific because that’s where the growth will be,” Lee said. U.S. President Barack Obama, he said, must understand this.

“If you do not hold your ground in the Pacific you cannot be a world leader,” Lee said, “That’s number one.”

“Number two, to hold ground in the Pacific, you must not let your fiscal deficits and dollar come to grief,” he said.
(Bloomberg). He indicated a great concern, which we have mentioned time and again on this blog, which is the war against the use of the U.S. currency as the world's business currency.

He fully expects India and China to become economically dominant through cold, calculating, economic pragmatism as the United States diminishes to third-rate, then less.
(Economic War Of The Pacific). One thing that Lee Yew surely did not expect to happen was how suddenly it took place, because he also said:
“In 30 years they’ll have an economy, not per capita but in total terms, bigger than the U.S.A.,” and China is now building political and strategic influence to protect its economic growth, Lee said.
(ibid, at quote). He expected this "China is number one" to take place circa 2039, but it happened 25 years sooner than that in 2014.

Incredibly, it happened in only a mere 5 years, not in the expected 30 years.

In the previous post of this series I followed up on this issue, reading economists who saw "it" happening sooner than Lee Yew had:
Almost exactly five years later, I followed up with The Government Catastrophe Has Already Happened, pointing out that while officials in the U.S. government squabble and waste our wealth and time, our reputation in the world plummets (Decline of U.S. Reputation - Why?, She's Come Undone).

During that time other Dredd Blog Series added details (First Shots Fired In The Currency Wars, Phase Five Of The Currency Wars? - 3, Clash of the Titans of Export, Clash of the Titans of Export - 2, and the like.

Regular readers know that Dredd Blog had the direction things were going clearly in sight:
The US is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies.

The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019.
(Financial Times; or Voice of America). This new estimation written about in a report by the International Comparison Program, which is part of the United Nations, puts the date about five years earlier than previously expected.
(Economic War Of The Pacific - 3). No one would have said it would happen in five years, in 2014, but it has.

Wars are bringing the 1% to their thrones of wealth (American Feudalism - 10) even as those wars are bringing the 99% to more poverty and inequality (The Greatest Source Of Power Toxins?, War is the Highway 61 of the 1%).

The next post in this series is here, the previous post in this series is here.

"Telegraph Road", by Dire Straits (lyrics)

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