China’s economy was supposed to surpass that of the US by 2040, Goldman Sachs predicted in its famous 2003 Bric report.
But the world speculated on the weekend whether China surpassed Japan to become the second largest economy. A senior Chinese official suggested so.
Yet, this is old news. We argued in December that China may have already attained this distinction, judging by last year’s performance. So, the real question is where China stands vis-à-vis the US.
Beijing commands an economy just shy of $5 trillion, galloping at 9% a year. Washington can pride itself in $14 trillion worth of output, but the rate of growth doesn’t inspire pride. Consider that since 2005, the US has either limped ahead or fallen behind—advance data on Friday that showed 2.4% growth confirmed this trend. In that light, as the Financial Times observed, total US output might be hovering around the same level it was at in 2005.
It’s time for Goldman to revise its prediction.