Here’s How Fast China’s Economy Is Catching Up to the U.S.
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China and America have avoided a trade war, for now at least. By agreeing to increase purchases of U.S. goods in a bid to shrink its surplus with America, President Xi Jinping has avoided a growth-sapping trade spat. What’s more, it appears that his plan to dominate industries of the future remains unchecked. Meantime, China’s pledges to open up such long-fettered industries as finance and to reduce barriers for autos and other sectors is set to lure even closer engagement with corporate America, deepening the “Chimerica” union. Here’s a by-the-numbers look at the relationship between the world’s two economic giants:

China’s GDP will overtake the U.S. level in at these projected average growth rates:

China and the U.S. make up almost 40 percent of the world economy

As China grows, it’s making up a larger share of the global economy. But the growth is not all at America’s expense—China is muscling out Europe and Japan, too.

Most Chinese people are still much poorer than the average American

Even on a purchasing-power parity basis that adjusts for price differences, the average person in China still has only about a third the spending power of an American. So even if China buys additional U.S. grains and natural gas, it will be tough to cut the trade deficit if American shoppers accelerate their own spending.

Figures are in purchasing power parity, 2011 international dollars.

China is already the world’s largest trading nation

China’s exporting prowess has fueled massive trade surpluses and tensions with the U.S. China will buy an additional $60 billion to $90 billion worth of American goods over the next several years, with agricultural products poised to benefit in the near term, followed by energy and ultimately non-high-tech manufactured products, according to Morgan Stanley.

China has about the same proportion of city dwellers as the U.S. did in 1940

Farming in China is changing, paving the way for decades of further urbanization. That’ll fuel demand for jobs, apartments and services, beefing up the purchasing power of 300 million to 400 million people. That’s the size of the European Union.

The U.S. and Chinese economies are increasingly intertwined, making their bilateral relationship key to global prospects. While the 20th century belonged to America, whether the 21st will be China’s remains to be seen. And while an all-out trade war appears to be off the table for now, China’s rise is destined to pose ongoing challenges for Donald Trump and his “America First” ethos.