Chapter 1
GDP: Toward the U.S.-China Duopoly
Just 10 years ago, in 2001, China’s nominal Gross Domestic Product (GDP) was the sixth-largest in the world: only a little larger than Italy’s. It comprised 12.9 percent of the GDP of the United States and 32.4 percent of Japan. By 2010, when China overtook Japan to become the second-largest economy in the world, it reached 41.2 percent and 107.7 percent respectively, exceeding Germany’s GDP by 78.8 percent, Britain’s 2.6 times, France’s 2.3 times, and Italy’s 2.9 times (Table 1.1).
Table 1.1 GDP at Current Prices ($ billion)
Source: IMF WEO Database, September 2011.
| 2001 | 2010 | |
| United States | 10,286 | 14,527 |
| China | 1,325 | 5,878 |
| Japan | 4,095 | 5,459 |
| Germany | 1,892 | 3,286 |
| United Kingdom | 1,471 | 2,250 |
| France | 1,341 | 2,563 |
| Italy | 1,118 | 2,055 |
| India | 488 | 1,632 |
| World | 32,008 | 62,911 |
Within the same period, the United States’ share of the global GDP dropped from 32.1 percent to 23.1 percent, while that of China surged from 4.1 percent to 9.3 percent (IMF 2011).
Between 2001 and 2010, China’s GDP in current dollars increased 4.4 times against 1.4 times in the United States, 1.9 times in France, 1.8 times in Italy, 1.7 times in Germany, and 1.5 times in the United Kingdom. In India it rose 3.4 times, in South Korea twice.
Our simple simulation has shown that, if in this decade the U.S. annual nominal GDP growth averages 3 percent and China’s (in current dollars) 10 percent,1 in 2020 the size of the Chinese economy will reach three-quarters ...
