Assuming China's recent massive growth rate of 10% holds and that America keeps growing at its historical average of about 3% a year, China will overtake the US in about 30 years.
There are some caveats to this analysis. First of all, no country can sustain a 10% growth rate for more than a few years without massive inflation taking its toll. Also, the backbone of China's economy: cheap labor, is becoming not so cheap as the nation gets richer (as the GDP goes up, labor gets more expensive), the standard of living goes up, and people demand higher wages (labor will always move around the world). In short, China cannot sustain a 10% growth rate for 30 years. In fact, China's GDP took a big hit last quarter.
On the American side, our GDP growth has been historically 3%, but in the last few years, due to massive increases in productivity, our GDP growth rate has been higher in the past 40 years.
source: http://wiki.answers.com/Q/When_will_China_overtake_USA_as_global_economic_power
There are some caveats to this analysis. First of all, no country can sustain a 10% growth rate for more than a few years without massive inflation taking its toll. Also, the backbone of China's economy: cheap labor, is becoming not so cheap as the nation gets richer (as the GDP goes up, labor gets more expensive), the standard of living goes up, and people demand higher wages (labor will always move around the world). In short, China cannot sustain a 10% growth rate for 30 years. In fact, China's GDP took a big hit last quarter.
On the American side, our GDP growth has been historically 3%, but in the last few years, due to massive increases in productivity, our GDP growth rate has been higher in the past 40 years.
source: http://wiki.answers.com/Q/When_will_China_overtake_USA_as_global_economic_power
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