...once again pining for China's ascension. What could possibly go wrong between now and 2016? Niall Ferguson at it again.
So when you look ahead to the next decade, what will the U.S. and Europe’s position be in the world economy and ultimately what do you see for China and Asia in terms of their positioning?
The International Monetary Fund’s projections for the next five years give us an answer to that question of where we’re gonna be in just a few years’ time. And the answer is that the United States will no longer be the number one economy in the world in terms of gross domestic product on a purchasing parity basis.That’s an important qualification, because it makes a big difference if you calculate GDP on that basis and take account of the fact that a haircut in China is way cheaper than a haircut in the United States. But that’s a fairly widely accepted convention to take account of differences in non-tradables. And on that basis by 2016 China will be the biggest economy in the world. And the U.S. will be number two, for the first time since the 1870s the U.S. will lose its lead position.