China's Economy Now Second Only To U.S.: What Does the Future Hold?
On August 16 the Japanese Cabinet Office announced that Japan's second-quarter GDP was for the first time smaller than China's. A media frenzy ensued, proclaiming China's economy larger than Japan's (and second only to that of the United States). Analysis firms raced to predict when China would surpass the U.S. -- PricewaterhouseCoopers pegs 2020; Goldman Sachs claims 2027.
As a practical matter, China's GDP is less than 60 percent that of the United States. And because China's population is four times larger, even if its GDP equaled the United States', its per capita GDP -- a proxy for living standards -- would still be one-fourth America's.