The Myth of China's Rise and America's Fall

The visit this week of the Chinese Premiere to Washington is putting the U.S. / China relationship front and center.

Media reports will state that the rise of China is unstoppable and that American decline is already well underway marked especially by the precipitous fall of U.S. manufacturing.

But let's take a step back and look at the past 110 years to see if this is actually true.

According to figures gathered from the World Bank and the Statistical Abstract of the United States:

In 1900,

The United States was already the richest country in the world.

The U.S. share of global GDP was about 18%

China's share of global GDP was close to 12%

Manufacturing in the United States accounted for 19% of all economic activity.

By 2010,

The United States remained the richest country in the world.

The U.S. share of global GDP had increased to 23%

China's share of global GDP was about 10%

Manufacturing in the United States accounted for 20% of all economic activity.

So, in the last 110 years, America's wealth and economic power- relative to that of the rest of the world- has risen, while China's has fallen.

Further, U.S. manufacturing activity is a bit higher than it was when the first American Century began.

Given a time frame of decades- rather than merely quarters- we could rightly conclude that the death of America's ascendancy and manufacturing, along with the inevitable rise of China, have all been greatly exaggerated.