2018: China to Overtake USA in GDP? You Decide

"Michael Pettis recently challenged The Economist to a bet. Pettis bet the Economist that China’s GDP will NOT surpass America’s in 2018.
Pettis believes China’s GDP growth will be less than 3% a year, while the Economist, thinks it will be above (more details below).
Mr Pettis is a finance professor at Peking University’s Guanghua School of Managemen.
AMERICA’S GDP of approximately $15 trillion is approximately double the size of China’s. The Economist provided an interactive chart where readers can decide for themselves when this historic event will occur.
Below are some important notes about China and America’s GDP. The Economist also makes an important note that exchange rates are an important factor in the calculation. Obviously the other important components are inflation and GDP growth per year.
Below are some stats from the Economist:
Over the past ten years, real GDP growth averaged 10.5% a year in China and 1.6% in America; inflation (as measured by the GDP deflator) averaged 4.3% and 2.2% respectively. Since Beijing scrapped its dollar peg in 2005, the yuan has risen by an annual average of just over 4%. Our best guess for the next decade is that annual GDP growth averages 7.75% in China and 2.5% in America, inflation rates average 4% and 1.5%, and the yuan appreciates by 3% a year. Plug in these numbers and China will overtake America in 2018. What do you think?
Chart from 2011:.."




at http://www.valuewalk.com/2012/04/2018-china-to-overtake-usa-in-gdp-you-decide/?utm_source=rss&utm_medium=rss&utm_campaign=2018-china-to-overtake-usa-in-gdp-you-decide