At three different points in President Obama’s recent speech at the Charlotte convention, he cited the economic challenges that China poses to the United States. In other speeches, he has alluded to what he seems to regard as a U.S.-China race to promote the use of “green” energy sources. Indeed, to win that race, the administration is spending large sums of taxpayer money and imposing strict mandates designed to push green technologies that cannot pass the market test. The China threat also serves as a big part of the president’s rationale for protecting weak U.S. firms from foreign competition and for his schemes to reshape the U.S. auto sector.
Like the president, many Americans are clearly impressed with the results that Beijing’s economic policies have achieved. Today, 43 percent of Americans name China as the world’s leading economic power; only 38 percent name the United States. Europeans pick China by even larger margins. Doubtless many of these people would applaud President Obama’s green energy programs as an effort to take a page out of Beijing’s playbook.
The truth is, though, the notion that China is the world’s leading economy is preposterous. To the contrary, China remains a poor country. According to the CIA’s World Factbook, in 2011, China’s per capita Gross Domestic Product (GDP) was only 17 percent as large as that of the United States. Perhaps more tellingly, it was only 57 percent of Mexico’s.
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