As most know, China already has a larger GDP than the U.S. in purchasing power parity (PPP) adjusted figures, but it continues to lag in nominal terms. The size of China’s economy is absolutely critical to thinking about the future of competition between China and the United States. It is well understood that China already offers a more potent economic power than any competitor that the United States has faced since the late 19th century.
We also have a good sense of the problems faced by China: excessive private sector debt loads, underperforming state owned enterprises, an economy dependent on (apparently precarious) overseas exports, and, most alarming of all, a huge demographic cliff.
