When Will China’s Economy Be Number One?

President Barack Obama and President Hu Jintao of China toast during the State Dinner in State Dining Room of the White House, Jan. 19, 2011. (Official White House Photo by Lawrence Jackson)

When Will China’s Economy Overtake America’s? -- Yao Yang, Project Syndicate

BEIJING – Is China poised to surpass the United States to become the world’s largest economy? The International Monetary Fund recently predicted that the size of China’s economy would overtake that of the US in terms of purchasing power parity (PPP) by 2016.

But a recent co-authored study by Robert Feenstra, an economist at the University of California, Davis, shows that global economic leadership would pass to China in 2014. And, even more radically, Arvind Subramanian of the Peterson Institute of International Economics argues that China actually surpassed the US in PPP terms in 2010.

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My Comment: The assessment of China overtaking the U.S. economy is a bit premature .... but it is true that if present trends are any indication, the Chinese will be the dominant economic power by the late 2020s, and in regards to military power .... I would say by 2030 (if not sooner).

On a side note .... a sign of things to come .... China Has Divested 97 Percent of Its Holdings in U.S. Treasury Bills.