The near certainty that China will overtake the U.S. as the world’s largest economy in the next two decades is almost always regarded, in American public discourse, as an unwelcome prospect to be avoided. Fear of China's success underlies most mainstream media commentary.
Take, for example, New York Times columnist Thomas Friedman’s repeated exhortations that the U.S. adopt China’s economic policies just to keep up. Fear of China’s rise also saturates our political dialogue. The full-time provocateur Donald Trump is not the only one to demagogue the issue. Republican mainstream candidates, such as Mitt Romney and Rick Santorum, and President Barack Obama frequently appeal to voters’ unease about China’s rise in one way or another.
In one of many such instances, during his 2011 State of the Union Address, President Obama used Americans’ worries about China’s ascendancy to promote his own domestic goals. He threatened that China would “compete” with the U.S., citing the fact that China is home to “the world's largest private solar research facility, and the world's fastest computer,” as if Americans would care about those benchmarks in any other contexts. He also warned that China is building faster trains and newer airports than we are - another remote concern for Americans, the majority of whom do not use high-speed trains or airports in a given year. Such obliquely nationalistic statements are only going to become more prevalent as the 2012 presidential election draws near.
China’s economy overtaking ours, however, isn’t something to forestall. In fact, it would be a humanitarian disaster if it didn’t happen this decade.
China’s population is so massive that even if its economy matches America’s in aggregate size, most Chinese people would be left quite poor by American standards. There are roughly one billion more people in China than in the United States, so with a gross domestic product equivalent to that of the U.S., China would produce enough goods and services to afford roughly 300 million of its citizens with American-style living standards, if nothing were left over for the bottom billion Chinese. In other words, no matter what the income distribution, hundreds of millions of humans in China will be consigned to terrible poverty if China’s economy does not at least exceed America’s very soon.
By the investment bank Goldman Sachs' estimates, China’s GDP will eclipse America’s by 2027. The International Monetary Fund, however, projects that China’s output will be greater than America’s by 2016 in purchasing-power-parity terms (a comparison that adjusts for lower costs of living in poorer countries, which overstates China’s output relative to the U.S.’s). At that point, according to the IMF, China’s per-capita GDP - the amount of economic output per resident - would be equivalent to about 13,000 U.S. dollars (not adjusted for inflation). It would be $57,000 in the U.S.
For perspective, a hypothetical Chinese worker, with no family to provide for, making close to $13,000 per year, would fall near the 33rd percentile for U.S. workers in 2011, according to data from the Tax Policy Center. He or she would also be only about $2,000 above the U.S. federal poverty level for 2011.
