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  • China More Powerful than the United States?

    A recent Pew Research survey included a bizarre result: 44 percent of Americans believed China was the world’s top economic power, against only 27 percent picking the United States.

    Tough times have made people pessimistic and the media has picked up that pessimism and run, to the point of saying the United States is economically subservient to the PRC.  But the belief that the United States is inferior economically to China is way, way off the mark.

    Individual wealth is easy. In a very hard 2008, the average American earned about $47,000. The average Chinese citizen earned $3,400. Things in the PRC are generally cheaper so the World Bank multiplies the China number by two and a half. That puts the average Chinese at $8,500. Advantage: the United States, by a country mile.

    The pure size of the economies seems like it would be a close call, as the PRC has a billion more people. Plus China has been growing quickly. Yet the American economy is more than three times bigger.

    In fact, the United States by itself has over one-fourth of the world economy. We have held near that level for 35 years, despite our current problems. That’s about the same as China, India, Japan, and the rest of Asia combined. With sounder policies than we are presently following, the United States will be by far the world’s biggest and most powerful economy for a long time.

    What the Pew poll is probably tapping into is the widespread idea that China is America’s banker. The Obama administration repeated this early on. The Administration has stopped but the press still can’t quite figure things out.

    As with many mistakes, it’s based in part on a correct perception: America is running a huge and dangerous budget deficit. It has done nothing to help our economy and is a hotbed for political corruption. It contributes heavily to economic imbalances within the United States and globally. One of those imbalances is the PRC’s purchases of our bonds, which include $800 billion in Treasuries and several hundred billion in other government bonds.

    While our budget deficit is a bad omen for America’s future, the fact that China buys our bonds is not. In fact, it’s an endorsement of our future.

    The PRC takes in a great deal of money from the world, through its trade surplus and other things. The same set of rules that keeps the Chinese currency undervalued means Beijing can’t spend its huge pile of foreign cash within China. It physically can’t – by law, nearly all foreign money must end up right back with the Chinese government.

    So what does Beijing choose to do? It certainly isn’t buying our bonds as a favor. China does so because ours is the only economy large and sound enough to absorb the amount of money (and their economy isn’t). It’s not a loan, it’s an investment and the best choice they have. On exactly the same lines, the PRC ties its currency to the dollar. Linking themselves closely to the U.S. economy that way is also the best choice they have right now.

    The recession and the deficit are big problems, no question. Still, there’s no doubt at all about who has the world’s most powerful economy. Just ask China.

    Posted in Ongoing Priorities [slideshow_deploy]

    13 Responses to China More Powerful than the United States?

    1. Ben Gee, Edmonton, C says:

      The well being of an individual is often psychological. A person with a job that pays $ 100000 a years but has a debt of $ 100000 often feel poorer than a person that has much lower income but with money in the bank. And a person on his way down often feel worse than a person on his way up even if each start at different height.

      The grass is green on the other side of the fence.

    2. raj says:

      CHINA WILL TAKE AMERICA ONE DAY. THAT DAY WILL COME VERY SOON. THAT DAY AMERICA HAS TO THINK OF THEIR POLICY TO ENCOURAGE CHINA. AMERICA STILL HAS TO REBOUNCE. BEFORE CHINA BECOME SUPER POWER OF WORLD THEY HAS TO THINK. CHINA HAS BIG NUMBER OF POPULATION AND LAND. THEY CAN BEAT ANY COUNTRY IN WORLD. SO AMERICA PLS GET UP FROM SLEEP. I LOVE AMERICA AS MY FAMILY. PROUD TO B AMERICAN.

    3. Jackee Canada says:

      I can't wait untill America is gone. They deserve it.

    4. Pingback: Why China is Not an Economic Threat to the U.S. | The Foundry: Conservative Policy News.

    5. Pingback: Why China is Not an Economic Threat to the United States | Conservative Principles Now

    6. peTe says:

      I DONT THINK CHINA COULD MORE POWERFUL THAN THE U.S. THE U.S IS A STRONG GOVERNMENT AT ALL. NOTHING CAN DESTROY THE UNITED STATE NEVER AND EVER…..

    7. jdfnbefvbfhcv says:

      even if china were to attack the US I think others would help us out… The US is a powerful country regardless of debt… and china taking over the united states would be a bad sign for the whole world… there are a bunch of stupid people that want to hate on the US and would love for it to be attacked but they don't seem to realize if the United States were gone… China has the world to itself

    8. jay says:

      India was powerful and center of the world for 2000 years .even Europeans and Arabs badly want to go to India. slowly Islam and Europe took over India. when Islam ruled India Iraq was center of the world , when British took over India London was center of the world. last 50 years or so new york is the center of the world. it is again switching back to east that's all , east is suppose the be the center of the world politics economy science and art

      thank you

    9. Nick, US says:

      I seriously doubt China would invade the us they make a lot of money off of us and if they did there wouldn't be much left of either country. China has more tanks, and more than 7 million troops (about 4 million more than U.S.), Nato playbook says we nuke em they retaliate and because of Mutual Assured Destruction everyone's boned, so they wouldn't have anything to gain by doing so. but non nuke war is another story and to be honest I can't say China would win even with overwhelming numbers. I don't know about any1 else but I know my friends, family, and myself would take up arms if ever invaded. I won't ever join the army I don't want to go kill people so corporations can get rich but I and so many others would defend their people if attacked. As long as America has the second amendment we aint goin any where!!

    10. ryan says:

      China is not stupid enough to battle united states!! That will lead to World war 3!! I am Chinese!!!

    11. Michael says:

      China is ok but think of it 1,000,000 chinese soldiers equals like what 300,000 u.s marines even if they have larger numbers are soldiers are way better trained anf equiped

    12. prabodh says:

      China and us should not fight but should shake hands for worlds progress
      ……….

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