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China overtakes US economy this year? Please.

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China overtakes US economy this year?  Please.

Sure, we’ve got to get our house in order. But this is Chicken Little stuff.

The US is about to be overtaken by China as the world’s largest economy? 

Gimme a break.

I’m sure everybody has heard by now that the World Bank is projecting that China will replace the United States as the world’s largest economy this year.  While this makes for shocking headlines, let’s be frank:  it’s a bunch of nonsense.

The old cliché that there are lies, damned lies and statistics has never been more relevant. In order to arrive at its conclusion, the World Bank has had to use a measure that is highly dubious – the respective countries’ purchasing power, unadjusted for exchange rate differences. For a variety of reasons, this measure obscures more than it illuminates.

"While this makes for shocking headlines, let’s be frank: it’s a bunch of nonsense."

Even the Chinese government disagrees with it – although that mendacious government has a lot of reasons to do so.  By continuing to portray itself as an “emerging economy”  (emerging from what, one must ask; it’s the second largest economy in the world), China can ward off calls for better environmental stewardship, first-world labor protections, monetary transparency and consistency, and all the other practices that first-world economies embrace.

But, nevertheless, the simple fact is that US GDP is nearly twice the size of China’s, and that the average Chinese citizen has about one tenth the amount of money to spend as the average American.

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Angus DuBois
Angus DuBois
Contributor
Angus DuBois is the nom de plume of an entrepreneur of 20 years who, in cowardly fashion, prefers to keep his/her business identity a secret. Comments can be forwarded to angus@nexxuspublishing.com.

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