The claim by Donald Trump that the US economy is “much larger” than Chinese, and conclusion that US “will keep it that way”, are not true and deeply wrong. First, the claim that the US economy is “much larger” than the Chinese is not true: the US economy is indeed still significantly bigger than Chinese, but not “much larger” as Trump is rumbling. The reality is that the US economy is bigger than Chinese by one third, measured by nominal GDP, but not by purchasing power parity (PPP), something in which Chinese economy even exceeding US economy greatly. Saying that US economy is “much larger” than Chinese is like saying the German economy is much larger than the French or the British economy, not to mention that the purchasing parity in these countries is pretty even comparing to the nominal GDP, which is not the case in China, where the purchasing parity is two times bigger than the nominal GDP, measured in US dollars. 

Second, the growth in China is much bigger than the one in US. Two or three per cent in annual growth in US is consider a big growth, unlike in China where the economic growth is above six per cent. That being said, the conclusion that the things which are now US “will keep it that way” is totally unrealistic and thus, Trump going into unnecessary brawl with China is damaging to US, with the assumption that the sheer force is the key, even though the current strength of the two countries – excluding their allies (needless to say Trump is going on this road without blessing from his allies, who are Trump’s targets as well) – is rather even, with China having significantly bigger data growth on its side, closing the gap in nominal measuring as well. 

For people who don’t understand very well the difference between nominal GDP and purchasing power parity, I will give a little clarification: the nominal GDP, relevant to this topic, is related to the global finances and give the size of specific economy relative to the global finances. That being said, US has more economic leverage on the global market by one third. To simplify: on the global market for every US’ 100 dollars, China is following with 65. Roughly. On the other hand, purchasing power parity is relative to domestic market, in other words, what you can buy in particular country with specific amount of money. In that sense 65 dollars in China worth more than 100 dollars in US, because with 65 dollars in China you can usually buy more, unless you’re buying some foreign products (for example, German cars produced in Germany cost pretty much the same in US and China in US dollars). But, if you buy domestic products in China, you can buy more with 65 dollars in China than with 100 dollars in US. 

Now, why is this important, and how is this reflecting on the real strength of the two countries, and why is not so simple to measure the real economic power of the two countries based only on the sheer numbers of the nominal GDP? For example, let’s talk about building naval ships. If both, China and US, buying naval ships on the global market instead of producing them by themselves, than the math is simple: for every 100 US naval ships, China can buy 65. But, if both countries are producing them by themselves, and relying mostly on domestic suppliers – like they do – than, actually, China can produce more naval ships even today, considering only economic might. Of course, in reality, for building naval ships, US still have bigger legacy and bigger know-how, but, considering only economic aspect, China even today has bigger economic capacity for building naval ships, maintaining bigger army, producing more tanks and fighter planes. Again, China in this area is still significantly lacking know-how compared to US, but just considering economic might, the condition for China to exceed US militarily are already there. 

Of course, all of these is not surprising. It’s actually very simple as you can imagine: China has almost five times bigger population than the US, and in nominal value, in order for China to exceed US economically, they need only one fifth of US GDP per capita. Considering that very fact, pointless rumbling by the current US president is irresponsible and stupid, as his decision to go into unnecessary brawl with the power which is already exceeding US in some key aspects, with the future definitely not on the US side. 

But, it’s not everything so colorful and shiny for Chinese future neither. There is one key aspect in which US is holding the key: China is a lone wolf, having only Russia as a pariah on its side, and only because Russia is not doing well with its European neighbours. In her region China has poor record of relations with its powerful and quite hostile neighbours: China is traditionally in odds with Japan, having dispute over border with India and Vietnam, the disputes which are expanding on see routes in the South Chinese See with pretty much every major country. 

Globally, US is usually going with its powerful Western allies (now even excluding regional powers in Asia, like Japan, India and South Korea), who combined have enough population and more land and resources than China, making it almost impossible for China to exceed them in this century. But, when we return to Donald Trump, he did the best he could to alienate closest US allies, trying to go solo on China in pointless brawl (something in which Europe has no will or interest to participate), in which, solo, US can only lose.