Abstract: China’s leap from poverty due to the marvelously successful market reforms introduced in 1978 has obscured serious weaknesses in its economy—especially compared to the American economy. These weaknesses have been exacerbated by renewed Chinese state intervention that began around 2003. Many seem convinced that China is at the cusp of surpassing the U.S. economically. But Americans should not lose track of their huge advantages over the Chinese—in income, in natural resources, and in surprising areas such as labor. Heritage Foundation China and economic expert Derek Scissors, explains why it is vital that the U.S. remember its strengths and recognize profound Chinese weaknesses.
There is increasingly loud talk of China surpassing America in raw economic size within the next decade, or, adjusting for purchasing power, as soon as this year. Some of these claims are plainly inaccurate, most are misleading, and all are potentially harmful.