When the Soviet Union came closest to the US economy, its GDP hovered in the low to mid 60% range of the US.In 1995, Japan’s GDP peaked at 71% of the US.Today, China’s nominal GDP is around 70% of the US, and the gap has actually been widening since the COVID 19 pandemic.When the same pattern happens three times, it is hard to dismiss it as a mere coincidence.What is the reason behind this?Does it happen because the US grows alarmed at that stage and pushes back with measures like trade disputes?Or is there some deeper, conspiratorial reason behind it?
>gee dee pee
>>544911714You must be slow on the uptake not to see that most of US GDP comes from “services” that businesses provide to one another. Google pays Amazon, Amazon pays Disney, and so on, while all this money ultimately comes from the US government printing money and pumping it into the economy. The US produces practically nothing. Its share of global trade is declining, yet its GDP keeps growing while the American middle class is shrinking.Geez, it really makes you wonder.
>>544911714>GDP and "The Economy" are unrelatedChina does more with less, and their "less" is more than America's.
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>>544913439>>544911714If you look at GDP by PPP, China's lead over the US continues to grow.PPP is especially more important in China's case because everything is already made there as oppose to other countries who need to import first in USD and then factor in the shipping costs and tarrifs. In fact, China is the only country that possesses all the industrial categories in the UN's industrial classification. remember, they fund the PLA using renminbi meaning the inputs aren't sourced from the US. that's why using GDP nominal numbers can be dubious because of exchange rates, inflation, and China artificially keeping their yuan low for exports.
>>544913748The more stuff they make, the higher they climb on the value supply chain, nominal GDP is less relevant to them than GDP by PPP.
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>>544914080If PPP were a much more useful metric for assessing national power, we would have to consider India a powerhouse whose strength has already reached 70% of the US.Yet no one thinks that way, not even Indians themselves.
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>>544914218PPP is less relevant to India compared to China. They aren't an industrialized juggernaut like China. India has imports much more than they export.
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>>544914407Saying that PPP becomes meaningless for countries without a very high export share is ultimately just a long winded way of saying PPP is useless.If that were the case, why look at something like PPP in the first place instead of simply checking export rankings or export volume?
>>544914676I didn't say meaningless, I said less relevant. Purchasing power becomes more important when the country is industrialized as it can export more than they import and rely less on using the dollar.
>>544915013 I don't understand what you mean about, "when the country is industrialized as it can export more than they import and rely less on using the dollar"Currently, because the vast majority of exports are settled in US dollars, the higher the share of exports in a country's economy, the more significantly that economy is affected by the dollar.The larger the share of exports in a country's economy, the more vulnerable that economy is to fluctuations in the USD exchange rate.South Korea has one of the highest export to GDP ratios in the world, and whether the USD exchange rate moves by even 10 cents can send severe shockwaves through the entire national economy.Exchange rates directly dictate export pricing, and product prices inevitably dictate sales volume.Thinking I might have had it backwards, I even asked an AI twice, and both times it confirmed that the higher the share of exports in a country's economy, the greater the impact of the USD exchange rate.Exports account for 22% of China's economy, which is higher than Japan's 17%, yet Japan's economy took a severe hit in 2011 due to the yen dollar exchange rate.
>>544913498Those US and EU lines are about to shoot up to the moon thanks to AI data centers.
>>544916200they still won't catch up, China recently announced $240 billion or something like this public funding for new data centers, and China already has the electrical capacityChina is going to wipe us out in AI, and when that bubble pops there will likely be no western survivors
>>544911714Your graph measures nominal GDP, which is influenced by exchange rates. The US dollar appreciated relative to the yuan in the 2021-2025 period, which was because the US raised interest rates to deal with inflation whereas China did not. In real terms, China's economy has consistently grown faster than the US economy.
>>544917588I might add that it is true that China's economic growth has slowed compared to the past, and it is to be expected that China's economic growth will continue to slow. There are many contributing factors to this.(1) Most low hanging fruit has already been picked, in terms of infrastructure investment opportunities. A new high-speed railway line between two mid-tier cities does not generate as much economic growth as a high-speed railway line between Beijing and Shanghai, but it still costs as much to build; in fact, it might even cost more, due to terrain being more difficult than the flat Central Plain.(2) China is focusing investment more on economic resilience than economic growth, in order to be more resilient to sanctions and export controls. For example: China is over-investing in green tech, more than makes economic sense, in order to be less dependent on imported natural gas, oil and aircraft parts. Another example: due to export controls, China is building domestic microchip manufacturing machines instead of just importing them, which is more time-consuming and expensive. All this slows China's economic growth but also makes China's economy more resilient.(3) A lot of effort is being spent on attempting an orderly financial clean-up and deleveraging of the real estate sector, shadow banks, and provincial finances. This slows growth but increases long-term economic resilience.(4) China's labor force size has peaked (although worker productivity is still rising)
