In the 80's, everyone was predicting that Japan was going to 'overtake' us (America). It turned out to not be true. Now everyone seems to agree that China will 'overtake' us. Couldn't they be wrong again?
Japan didn’t overtake USA as the biggest economy, because USA became jealous of Japan (just like USA is currently becomming jealous of China), and USA ploted a way to stop economic growth of Japan.
They started a trade war with Japan (sounds familiar, right, pretty similar situation right now), then they pushed Japan into signing Plaza Accord, and that is how USA managed to slow Japan’s progress to the point it wouldn’t become the biggest economy.
Now USA is probably trying to do the same with China, but this time it will be a lo harder, because China has a much bigger popullation than USA, and China can’t afford to be a much smaller economy than USA, so that USA can get to feel that they are the N° 1 economy, because that would mean leaving dozens or even hundreds of millions of their own people in state of poverty and truncating their aspirations to live better lives only so that USA would stop bullying them. And as well, because China has their own military forces, so USA won’t try to use their “big stick” ideology to push China into “you (China) gotta do what I say, whenever I say so and stop your own progress and development, because we (USA) want to keep to be the N°1 in the world for ever!!!”.
The problem Japan had was twofold. It was too small, China being 10 times larger, and it made the same mistake the US made in its last recession. It let over leveraging of inflated real estate undermine the economics of the country. Today, Japan is still trying to recover. It pumps more funds into the economy, borrowing from it’s domestic retirement savings, desperately trying to refloat its economy. By doing so, it is buying time to recover. It may not work. What is happening is Japan is getting old and with her past and current culture of not allowing foreigners become long term residence, her population is on a decline.
“Japan remains definitively stuck, despite a long and aggressive experiment with ultra low rates. A quarter-century after its property bubble burst, a penny-pinching generation has come of age knowing only economic malaise, stagnant wages and deflation—a condition where prices fall instead of rise.” The enduring mystery of Japan's economy
China knows and studies the Japanese history that led to her success and now failure decline. China has copied Japan’s rise and is shift gears like Japan into technology. Having said that, times are changing because technology is already here and moving at a frightening clip. Most developed countries are using robotics and AI to improve their manufacturing. With this strategy, China hopes to beat the issue of falling labor resources caused by demographics. China is also more open to the outside world. The US complains about restrictions to China, but all developing countries try to protect their nascent industries, especially those that the feel are in the national interest
“What is Made in China 2025? Made in China 2025 is a blueprint for Beijing's plan to transform the country into a hi-tech powerhouse that dominates advanced industries like robotics, advanced information technology, aviation, and new energy vehicles. The ambition makes sense within the context of China’s development trajectory: countries typically aim to transition away from labor-intensive industries and climb the value-added chain as wages rise, lest they fall into the so-called “middle-income trap.” Chinese policymakers have diligently studied the German concept “Industry 4.0,” which shows how advanced technology like wireless sensors and robotics, when combined with the internet, can yield significant gains in productivity, efficiency, and precision.” Why Does Everyone Hate Made in China 2025?
China is much larger than Japan and will peak at a larger size, but otherwise has more similarity than Chinese would like to admit. Some extrapolations from the Japanese experiences do make sense.
Made in China 2025 is likely to have mixed results with China dominating some fields and not others. China can’t export everything and import nothing. That drive is what led to Japanese currency appreciation, not a brief central bank intervention which Chinese love to use as another excuse to insult the little Japs as subordinate. Ironically, this conspiracy theory discounting economic fundamentals makes China more likely to keep charging down the same route of promoting exports and skimping on consumption.
The wave of Chinese foreign investment and BRI is not so different from Japanese investment and aid programs. The Chinese are just more brash in talking about it. Profitable investment in very different countries is difficult and good opportunities are limited. Losses are already showing up.
Japan exported its trade surplus. Other Asian countries manufacture exports and sell them in the West. Japan produced capital goods and technology and exported them to the other Asian countries.
China a few decades from now will be a prosperous and satisfied country of older people who do not need further rapid expansion of production and consumption. In other words, it will have achieved what Japan has achieved.
Randy McDonald, A fan of cities, islands, migration and Trek and more
The issue is a matter of scale.
A Japan that had a population less than half the size of the United States would have needed to become improbably wealthy to surpass the United States. The only countries with levels of GDP per capita higher than the United States are all either low-population natural-resource exporters or international financial centres or, sometimes, both. For Japan to become much richer than the United States would imply that Japan has made some sort of fundamental breakthrough, in technology or organization or something, that would allow Japan to be much more productive and much wealthier than the United States. Japan would need to be as proportionally richer than the United States, roughly, as the United States is proportionally richer than Argentina. How this can be achieved, given the free flows of ideas and capital and goods between Japan and the United States, is not at all clear.
China, in marked comparison, is simply a much larger country than Japan, much larger even than the United States. China has a land area comparable to the United States and a population four times the size. China is significantly poorer than the United States as measured on a per capita basis, but China is also a country that has demonstrated—for four decades!—a decided ability to grow more quickly than the United States. Barring catastrophe in China, the ability of the economy of China to eventually outgrow the United States seems all but certain. Per capita measures will continue to lag, given China’s relative poverty, but they will continue to improve; more, given income inequality in China, that country may already have a population of middle- and upper-income people comparable to that of the United States. For China not to overtake the United States at this late stage seems unlikely.
China has already overtaken America:
Way back in 2014, now let's have a look at Japan way back before it was overtaken by China and eventually India as well:
You see “everyone” is talking about Nominal GDP in your question which if you take a closer look at it would realise why its such a silly metric to judge which is the worlds largest economy, a large country say India can become the worlds third largest economy in GDP Nominal terms just by appreciating its currency a lot, it at best can be used as a way to tell how far tourist dollars go in any given country but should never be used to judge the real production power of an economy, similarly China’s Nominal GDP can become the largest in the world overnight simply by appreciating its currency.
Japan was hit with the Plaza Accord (Effectively destroying its economy), it has 1/3 the population of America, it has barely any land mass compared to America, no resources as well, for Japan to surpass America (Which is still possible) is a significantly harder task than it is for China.
By the way China has none of these limitations, its population dwarfs that of America, it has a comparable land mass to America and far more resources than Japan, to surpass America with all these advantages was a piece of cake for China.
Perhaps you should have asked this question way back in 2013.
译文来源：三泰虎 http://www.santaihu.com/49529.html 译者：Joyceliu
David Sieracki, B.A. Political Science & History, Virginia Tech (1989)
I remember the 80’s. I do not remember “everyone” predicting any such thing. Can you provide a shred of evidence to support your premise?
As for China “overtaking” the US, if we are discussing GDP, one would certainly hope so. They have 4 times the population of the US. They have proven that they are perfectly capable of applying macroeconomic principles that assure success. It’s possible they will fail, but not likely.
If we are discussing quality of life, or military superiority, the prediction gets much more cloudy. China’s population density is actually a handicap when attempting to increase quality of life, and it is not really a military advantage in this era of technological warfare.
China has already vastly increased the quality of life for its citizens. That’s why fewer and fewer seek to emigrate. They also have achieved a level of military preparedness that makes a war of aggression by any Western power too costly to contemplate.
In short, China is going to do fine, whether of not they “overtake” the US by some arbitrary metric. A rising tide floats all boats equally. The answer to this question simply isn’t important.