When Will the Chinese Ecnomy Overtak the U.S. (in total wealth, not per capita)?

[Bo]

Option 2

[phk]

I'm assuming you mean real GDP?

Maybe 2025-2030.

[Bo]

I'm assuming you mean real GDP?

Maybe 2025-2030.

I don't think nominal or real GDP matters when it comes to comparing the sizes of different nations' economies.

[phk]

I'm assuming you mean real GDP?

Maybe 2025-2030.

I don't think nominal or real GDP matters when it comes to comparing the sizes of different nations' economies.

Btw. You can assume average growth rates of both GDP's and just use the geometric growth rate formulas to figure this out.

[Psychic Octopus]

HAH I love media hype.

[jokerman]

HAH I love media hype.

Hype?

Any meaningful growth of the U.S. economy during the last decade is "hype."  Creating the greatest and quickest expansion of industry, infrastructure, and technology in human history is most definitely not hype.

[Torie]

In August of 2045.

[Sbane]

I would say within the next 10-20 years, depending on whether China can continue to grow at 10-12%.

[phk]

I would say within the next 10-20 years, depending on whether China can continue to grow at 10-12%.

From what I gather

China is 4.33 trillion US
US is 14.20 trillion US.
This was Google's Public Data in Nominal GDP.

If you want to figure out what things will be like over time.

Growing at x%:

1% implies doubling every 72 years
2% implies doubling every 36 years
3% implies doubling every 24 years.
4% implies doubling every 18 years.
5% implies doubling every 14.4 years.
6% implies doubling every 12 years.
7% implies doubling every 10.2 years.
8% implies doubling every 9 years.
9%  implies doubling every 8 years.
10% implies doubling every 7 years.
12% implies doubling every 6 years.

A 12 year, 12% growth horizon could do the trick. Especially if the US's post-2008 growth is anemic and China's is spectacular.

[Sbane]

I would say within the next 10-20 years, depending on whether China can continue to grow at 10-12%.

A 12 year, 12% growth horizon could do the trick. Especially if the US's post-2008 growth is anemic and China's is spectacular.

I suspect China won't be growing at 12% if the US isn't growing. Somebody has to buy the crap they make or they will face a crisis sooner rather than later.

[Torie]

Assuming the current numbers, 4.33 and 14.2, China growing at a 3.5% annualized rate faster than the US, would imply China catches up to the US in 35 years or so. I don't think the faster annualized growth rate of China will exceed 3.5% over the US over such a long period of time, and it might well be more on the order of 2.5%. (if it is in the latter figure of 2.5% (say 4.5% versus the US at 2% annualized growth, than it will take about 48 years for China to catch up to the US.)

Keep in mind, that China's population growth rate during this period will probably be slower than the US, perhaps by a percent of so a year. Granted, China will get a huge boost as an ever greater percentage of its population enters the industrialized modern economy, but I don't see that boosting the growth rate much above the numbers I am using. Another drag on China will be its questionable judicial system and protection of property rights, and overall corruption. China's need to attend to environmental degradations, and climate change, and all the rest, will also slow down its overall growth rate.

Having said all of the above, Goldman Sachs projects China will be larger by 2025-2030. I suspect Goldman is making the mistake however of assuming that the growth gap between the US and China can continue to be as large as it is now, or almost as large, for a period extending to 2030, and I strongly suspect that that is a mistake. As China develops, its rate of growth will slow down, since the marginal gains will became smaller as the cheapest ways to increase the size of the economy are no longer available.

[phk]

Assume a long run average growth rate for any country.

Plug in

Y(PRC_Future_GDP) = 4,300,000,000,000e^(PRC_Growth_Rate*Time)
Y(USA_Future_GDP) = 14,200,000,000,000e^(USA_Growth_Rate*Time)

into any graphing calculator and figure out the intersection.

[Bo]

Assume a long run average growth rate for any country.

It is difficult to make that kind of assumption for China.

[bullmoose88]

Assume a long run average growth rate for any country.

It is difficult to make that kind of assumption for China.

Indeed.  Surely China will run into diminishing marginal returns to its inputs...hard to say when, but the growth rates thrown around here can't last...can they???

[phk]

Assume a long run average growth rate for any country.

It is difficult to make that kind of assumption for China.

Indeed.  Surely China will run into diminishing marginal returns to its inputs...hard to say when, but the growth rates thrown around here can't last...can they???

Well just approximate an upper and lower bound.

[Bo]

In August of 2045.

Switch the 4 to a 2 and I might agree with you.