20
Jan

America is slipping to No. 2. Don’t panic.

Written on January 20, 2014 by Waya Quiviger in Americas, Op Ed

Charles Kenny is a senior fellow at the Center for Global Development. This essay is adapted from his new book, “The Upside of Down: Why the Rise of the Rest Is Good for the West.”

America will soon cease to be the world’s largest economy. You can argue about why, when and how bad, but the end is indeed nigh. According to the Penn World Tables — the best data to compare gross domestic product across countries — China’s GDP was worth $10.4 trillion in 2011, compared with a U.S. GDP of $13.3 trillion . But with China’s economy growing 7 to 10 percent a year, compared with the recent U.S. track record of less than 3 percent, China should take the lead by 2017 at the latest.

Already, China is the world’s top trading nation , edging the United States in total imports and exports in 2012. And Arvind Subramanian, an economist formerly with the International Monetary Fund, predicts that by 2030 the world will have four major economic players: China will be the heavyweight, followed by the United States and European Union, with economies about half as large, and then India close behind.

Time to panic? A recent Chicago Council survey found that only 9 percent of Americans believe that Chinese growth will mostly benefit the United States, while 40 percent think it will be mostly negative for us. And a 2012 YouGov survey suggests that about half of Americans would prefer to see the United States stay on top, even with anemic economic growth, rather than grow rapidly but be overtaken by China. You only need recall President Obama and Mitt Romney sparring over who would be tougher on China to see how Washington channels this popular angst.
Certainly, China’s growth poses some challenges — but the opportunities it offers far outweigh them. And no matter the hand-wringing, losing the title of largest economy doesn’t really matter much to Americans’ quality of life. Read more…

Published on January 17 in the Washington Post http://www.washingtonpost.com

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