Is China already the world’s most dominant economy?

By one measure, yes | Finance & economics

9/18/2021 1:16:00 AM

Ten years ago an economist predicted that China’s economic power would overtake that of America by 2020. That has come true—on one measure

By one measure, yes | Finance & economics

.To gauge a country’s economic “dominance” Mr Subramanian combined its share of world trade, net capital exports and globalGDP(measured at both market exchange rates and purchasing-power parities, which try to correct for international differences in the price of similar goods). He gave each attribute a weight loosely based on the

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IMF’s formula for allocating votes to its members. His index, he argued, successfully captured Britain’s economic hegemony in 1870, its rivalry with Germany in 1913 and its eclipse by America in the subsequent decade.According to this measure, Mr Subramanian predicted, China would become the world’s most dominant economy by 2020. In the ten years since that forecast, China has faced a trade war with America, its growth has slowed and its currency has suffered bouts of volatility, obliging it to tighten controls on capital outflows. Yet Mr Subramanian’s central prediction has come true. Based on the book’s original formula, China became the world’s most dominant economy last year (see chart). Its growth slowdown has been no worse (so far) than Mr Subramanian expected and the covid-19 pandemic has helped increase its share of global trade.

Mr Subramanian successfully predicted how his own index would evolve. But does his index successfully capture economic dominance? Other authors have included wealth,GDPper person and other proxies for economic sophistication, as well as scale. (Our favourite index of a country’s global influence, put together by Francesc Pujol of the University of Navarra, counts the number of times a country appears in the charts of headtopics.com

The Economist.) These measures give America a bigger edge.For the sake of tractability, Mr Subramanian’s measure gives every dollar of exports equal weight. But some of America’s high-tech exports appear to give it an economic “chokehold” over China that is worth more than their market value. Mr Subramanian thought that China’s growing share of

GDPand trade could soon elevate its currency into a rival to the dollar. But China’s yuan has made little headway. That is partly because China has tightened capital controls, a possibility that Mr Subramanian acknowledged. But he thought that if China clung to such controls it would be to keep the yuan cheap (by preventing capital inflows) not to prop the yuan up (by deterring capital outflows). Still, given the sorry record of most economic predictions, the book’s author deserves a handshake and a bow.

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You also have to consider the national will to take messures.The EU is too low efficiency.The US is in a cold civil war. Compare to them,the ccp ruling class is far more united. Yes. West killed Huawei out of jealousy and incompetency. West is good at building bombs and bullets to reaffirm its colonial value of winner take all model.

The USA, EU and allies made China an economic superpower. China still exports large part of its manufactured goods to these markets. If they really consider China as a strategic & economic threat then they must act on course correction without any further delays. Where is the doubt? They’re just resorting themselves and stepping back from a potential internal counter insurgency as disparities in wealth come to the surface.Only dominant if global trade buys from them snd not elsewhere.Should business have a political consideration or be purely profit n loss

Why should it be measured? Do you want to control it? I request to charge less for its annual subscription. Here I get the_hindu subscription at a very reasonable price. China as an economic superpower? China Economic dominance means nothing. A healthy and sustainable society is everything. Plus having nukes to destroy all-comers. If only the United States could expel all non-European descending peoples then maybe we could be prosperous again.

this is terrible news Epic troll with the picture. Well done.

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is the Economist dominated by China also now? Asking for a friend. Actually for myself, because you guys are weak! Why wouldn’t they.. Seems like people just like lying to themselves. horrible

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