China has dethroned Japan by becoming the official number two economic super-power in the World. It is now a race between Democracy and Communism and we only have one leg. China with its currency manipulating powers edged out Japan’s quarterly take by about 100 billion dollars which was expected; just not so soon. The dramatic reports also have China overtaking the United States by 2030. It is becoming harder and harder to say that we will always be number one.
Japan’s GDP for this quarter was $1.288 trillion compared to China’s $1.337 trillion and the Japanese expect China to widen the gap all year long. Its not all that surprising in reality because the Japanese economy has been stuck in a rut for a decade not to mention the Chinese economy has expanded to be 90 times bigger since the late 70′s. It appears though as only the Chinese are celebrating while the rest of the World is a wee bit agitated.
The reason the United States and the rest of the UN power players are just a bit pissed is because China fixes their currency and export prices. China makes products for cheap as we all know but then they export them for 2-3 times what they are supposed to and they base that off of their manipulated currency. China essentially decides how much their “dollar” is worth on a day to day basis. Taking this into account it is likely that China is not actually number two.
The idea that the Chinese will one day surpass the Americans in economic terms is fact but how quickly it happens depends on us. The United States has a 14 trillion dollar economy and currently China’s is around 4 trillion and conservative estimates say by 2050 we will be number two. The U.S. is still in a recession in part because we put less money into our recovery than the Chinese who were hit almost as hard at first. The key is now for us to recover and start climbing from our debt most of which is owned by the Chinese. The Bush era tax cuts are out the window and a tax hike is what we need. Keep in mind the Chinese work for pennies on the dollar and don’t complain yet here if we are not paid $20 an hour to press buttons on a machine we call the Union. I’m not saying we eliminate minimum wage as we learned our lesson from the industrial revolution and the Chinese have yet to experience it but if we want to remain number one we will have to pay for it; at least a little.
If we don’t start focusing on America as a whole instead of just ourselves then it is our children who will have to grow up in a worse off country. People like you and I also said that no one could dethrone our top spots for education and health-care yet we don’t even make the top 10 list anymore.