A Whole New World: China reclaims Economic Superpower Crown from USA

Sept. 28 2014 (TSR) – Leaders and citizens in developed nations need to be prepared for a major psychological, economic, cultural and political shift, which will impact the rest of this century. From Monday and beyond, China reclaims her crown as top World Economic Superpower, demoting the United States of America into second place.

According to estimates released by the World Bank’s International Comparison Program (ICP), China’s purchasing power-adjusted GDP is higher than originally thought which resulted in a radical change in calculations of comparable basket of goods and services across the globe, so-called purchasing-power parity (PPP). Using the cost of living data in 199 countries in 2011, the Dragon’s rise as world’s biggest economy is five years sooner than most economists had previously expected. Based on the new data and comparison from the previous survey in 2005, China performs to an astounding 20% higher result than what many economists thought.

China’s rise over the past decade has indeed been dramatic and its economic success on the world stage is impressive.

For the past 30 years, the annual growth rate has been around 10 percent. Based on conventional measurements, China overtook the United Kingdom in 2006 to become the world’s fourth largest economy. In 2009 it moved past Germany and in 2010 it drove out Japan to become the world’s second largest economy.

China has overtaken the U.S. as the world’s largest trading nation, taking the title in 2013 and has been the world’s largest exporter since 2009, and is now the world’s largest trader overall.

Powered by 1.4 billion people who both produce and consume goods, China’s trade surpassed $4 trillion in 2012, with exports rising 7.9 percent and imports rising 7.3 percent. The nation’s trade surplus, or what the country is profiting by is almost $260 billion for 2013.

Based on purchasing power parity (PPP), the figures suggest that China’s GDP will reach $17.9 trillion by end-2014, compared to $17.5 trillion for the US. This is a contrast to the IMF’s calculations on GDP using current price levels and market exchange rates, which puts US GDP in 2014 at $17.5 trillion and China’s at $10.0 trillion as Lúcio Vinhas de Souza, a Moody’s Managing Director and Sovereign Chief Economist, explained in May this year.

In the past decade, China has managed to maintain its GDP growth rate between 8-9 percent. It is that consistency that has garnered them their rightful place.

China has long set its sights on becoming the world’s dominant economic powerhouse, as well as a dominant figure in Asian politics. To accomplish this, the nation has cracked down on inaccurate and inflated trade numbers, which it no longer needs to inflate to make itself appear powerful. China has accomplished its initial mission.

“While it had been expected that China’s GDP would surpass US GDP in the medium term, new estimates — compiled by the World Bank’s ICP — indicate that China’s emergence as the world’s biggest economy will take place by the end of this year, five years sooner than most economists had previously expected,” Vinhas de Souza said in May.

Some economists based their calculations on nominal GDP and estimate that it would be few more years for China to become number one. However, many economists including those of the World Bank and IMF as well as investment banks around the world are banking on purchasing power-adjusted GDP, which is believed to be more accurate and stable.

PPP exchange rates provide a more representative way to compare the relative size of economies than volatile market exchange rates, as price levels, especially for non-tradable goods and services, are normally higher in high-income economies,” Vinhas de Souza explained.

Market exchange rates are also influenced by factors such as currency speculation, interest rates, government intervention, and capital flows between economies.

The same World Bank data, which was released in April 2014 — also highlights the rising economic importance of middle income economies. The report shows the ascending rankings of India, Russia, Brazil, Indonesia, Saudi Arabia and Turkey,which accounted for 31.6% of global GDP in 2011, and is an increase of 9.0 percent from the 22.6% in 2005.

In the same the report, the share of global GDP for the other 13 largest economies, classified as high-income economies, decreased to 44.9% from 56.3% over the same period.

Using also the PPP methodology, China now accounts for the largest share of the world’s investment expenditure at 27%, compared with 13% for the United States.

Asia and the Pacific, including China and India, accounts for 30% of world GDP, Eurostat-OECD 54%, Latin America 5.5% (excluding Mexico, which participates in the OECD, and Argentina, which did not participate and Argentina, which did not participate in ICP 2011), Africa and Western Asia about 4.5% each.

In terms of investment at 27%, China now has the largest share of the world’s expenditure for investment (gross fixed capital formation), followed by the United States at 13%, India (7%), Japan (4%) and Indonesia (3%).

Americans Most Woefully Unprepared of What’s To Come

As the world’s center of gravity now shifts to Asia as of next week, the United States of America – its leaders and citizens, who still live under prideful denial and arrogant ignorance, is the woefully unprepared of all by this incoming tectonic shift.

Until today, American leaders and the public refuse to listen and open their eyes, especially neocon, zionist (and tea party) warmongers.

Lost in the illusion that they are “the sole beacon of light in a dark and unstable world” and severely suffering from Savior Complex, most Americans are blind to a simple, mathematical truth: With just 400 million people, the United States can no longer deny the global economy’s new realities for much longer. With nearly $18 trillion in ever growing debt due to warmongering and irresponsible fiscal governance, they can no longer dominate the rest of the world, because Asians, with 60% of the world’s population, are now the best performers.

Asia’s middle class is transforming at an accelerated pace. Expected to skyrocket from roughly 500 million people today to 1.75 billion by 2020, it will inevitably catapult Asia from economic power to global leadership.

China’s number 1 position is particularly important when calculating the balance of power and the distribution of voting strengths in international organizations. The Asians, in particular the Chinese, can now officially flex its own muscles by demonstrating its economic strength, which also gives it influential political power.

China’s stature and influence, affects and changes the balance of power on a global scale, something that United States has had nightmare from for awhile now, which should explain all the destabilisations that has been going on from Arabspring, Libya, Syria, Sudan, Ukraine, now Iraq to name a few.

Case in point, the International Monetary Fund (IMF) and the World Bank.

In July, the BRICS countries agreed to start a New Development Bank (NDB) with $100 billion in capital where China will contribute nearly half, or $41 billion, of the total, with Russia, Brazil and India chipping in $18 billion apiece and South Africa contributing $5 billion respectively. Together, the five emerging economic giants, which generate about a quarter of the world’s economic output and hold 40 percent of the world’s population, will maintain majority control over the new institution.

The multilateral NDB is a clear hard slap at the U.S. dominated World Bank and IMF, who have hesitated for years to make changes to reflect and accommodate the fact that China is poised to overtake the U.S. as the world’s largest economy, plus nearly half the world’s economic activity now occurs in the developing world.

In an added show of defiance and disenchantment with the U.S. and its allies, the BRICS plan to establish a major new alternative pool of $100 billion in currency reserves that they would maintain and control outside the IMF. Once the new bank starts borrowing in global financial markets, this will likely outstrip the size of the World Bank, with annual lending of $34 billion as some analysts predict.

The new BRICS-led institutions will change the global finance landscape that was established by the U.S. and its European allies after World War II. The move is seen as breath of hope for many struggling nations who suffered from the hands of American unjust policies.

By 2040, USA will be a dwarf

A few years ago, Nobel economist and a renown China scholar Robert W. Fogel bluntly warned the world what’s ahead with the headline of a Foreign Policy feature: “$123,000,000,000,000: Why China’s Economy Will Grow to $123 Trillion by 2040.”

“In 2040, the Chinese economy will reach $123 trillion, or nearly three times the economic output of the entire globe in 2000. China’s per-capita income will hit $85,000, more than double the forecast for the European Union, and also much higher than that of India and Japan as China moves “from a poor country in 2000 to a superrich country in 2040,” he wrote.

America’s per-capita wealth may be higher, says Fogel, but “China’s share of global GDP — 40% — will dwarf that of the United States (14%) and the European Union (5%) 30 years from now.”

Unfortunately, America’s myopic warmongering adventures, is not helping the situation, creating more war debt rather than jobs.

The US keeps sliding into a no-growth economy, to 1% GDP growth in a generation. The Americans can thank warmongers like Sen. John McCain, the other neocons and Zionists who conned the US into the $3 trillion Iraq War, Libya, Syria and now the ISIS (permanent) war, who still believe the future will be won by aggression, armies, battleships and a half trillion a year defense budget. Because of them, the US continues to crumble from within: Poor infrastructure, rising taxes, political corruption, decaying educational system, dumbed down population, obesity, rise in violence, militarized police, while jobs and profits go overseas fattening foreign economies.

Moral decay is also a huge factor in the nation’s decline.

Whereas, Asia is speeding way ahead and winning the economic and political war.

In comparison, with China’s massive flowing profits flowing, the country has evolved into a new phase of hegemony which includes a number of things. Mao is now replaced by Edmund Burke as revolution becomes passé and conservatism entrenches the establishment, which is the Communist Party. America is more communistic than China per today.

In the high finance arena, the nation has expressed their goal to become the world’s reserve currency and gold exchange capital.

The Chinese government has been actively seeking to internationalise the renminbi to match China’s global economic status. Their policy is to promote international use of the renminbi in three stages through trade, investment and as a reserve currency. The Chinese dream is around the corner: The renminbi (RMB) – the official currency of China – is poised and expected to join the US dollar and the euro as one of the world’s top three global trading currencies in terms of volume by the end of 2015, and within five years, it could be fully convertible, bypassing the Japanese Yen.

Earlier this month, UK government embraced what is inevitable, and now plans to issue the “world’s first” Renminbi (RMB) denominated sovereign bond outside China “in the coming weeks” and will be used to finance the government’s reserves of foreign currency.

China is already one of the world’s largest investors in Africa and Latin America, both continents which remain very rich in natural resources.

The Chinese are also now developing a Moon landing program as they aim to become the second country to land a person on the Moon.

China has resurrected as a dynamic and rapidly growing economy with a greater vision for regional influence – staking controversial territorial claims and spending billions more each year on army, navy and airforce, building up their military, modernizing equipment and constructing new assets – to project power further into the Pacific and South China Sea.

All  this while it keeps investing in its future, creating jobs, building infrastructure, working towards clean energy, building high speed trains to connect Asia with Europe, rebuild the New Silk Road to connect the entire world, funding education and technology and its GDP soars.

Under the leadership of Prime Minister Li Keqiang and President Xi Jinping, the government has been vigilant in cleaning out corruption and deviant uncivilised behavior, with crackdown on people slandering and explicit pornographic content on websites. The Chinese are resurrecting Confucian values.

Beware the historical ignorance that the propagandists have been spewing. China has never colonised any overseas territories nor they plan to do so. They are and have been consistent with their peaceful development.

This is the most dramatic power shifts in human history. This is  the true transformation which Americans and the West must learn to embrace and must abandon ingrained barbaric ideas and old assumptions.

The door is now being open to liberate unthinkable thoughts and to think the unthinkable. It is time stop denying the end of American dominance in world affairs.

Behold, the Warmongering Century ends, and the Peace Warrior Century begins.

Welcome back, Middle Earth Kingdom.