China

The question comes down to how you evaluate things. Are the growth rate and money the only measures here?

God doesn't favorite China. Looking at its past 100 years, huge political unrest and communism experiments kept the country so behind the rest of world.

The technology, free market reform and globalization help China quickly escape from its historical baggage and catch up with developed world. The question is what value would win out at the end now everyone has equal footing.

Culture, political system and work ethic are the deterministic factors going forward. Would you prefer a world looking more like America or China?

The RMB is growing in importance and rapidly becoming an increasingly stable financial instrument in global trade. That is not to be debated.

Even though China's economy has overtaken the US in scale, there is one MAJOR issue that is commonly overlooked when contemplating the possibility of them becoming the go-to global currency... They are still an authoritarian state that controls and manipulates the free flow of information in-and-out of its borders. Baidu, Tencent, Weibo, and Alibaba are all still clones of basic US internet infrastructure. Until there is a great lifting of restrictions on the flow of information inside of China, I don't see them building the next Google anytime soon. (Baidu does have Andrew Ng doing some cool stuff in Deep Learning tough!)

I'm not trying to say there isn't innovation coming out of China, just that there won't be a technological renaissance to the likes of Silicon Valley until people can communicate more openly online about potentially dangerous ideas.

Can the RMB survive and increase its power with constant tension with HK and Taiwan over political ideology? I'm not sure... If the Chinese can slowly open up its internal lines of communication without massive protests or radical power struggles, they will be unstoppable.

The only question left in my mind is when given the choice to purchase technical infrastructure from the likes of Google/Facebook or Baiudu, what are developing markets (SEA, Africa..) going to pick. Chinese tech companies ideals might be more inline with rapidly developing companies than the old guard in SV..

I think the typical rhetoric of "China is bad because it steals innovation!" is usually misplaced. From China's perspective, there is nothing wrong with "stealing innovation," as this model has helped grow China's economy and lift millions out of poverty over the past few decades. The diffusion of information does not produce the same "value" as the production of information itself, but from China's perspective this diffusion certainly has its own value if it boosts the growth of native industry (which can one day hopefully enable China to produce more value from its own production of information).

From the American perspective, I think we tend to ascribe more value to hanging on to our innovation than is actually there. Hanging on to innovation will always provide a temporary advantage. The value of innovation is also dependent on the cost of preventing diffusion of the products of innovation. If the results of innovation are so valuable, companies should do more to prevent the outward flow of information, by locking up information systems and trying to hold on to as much of the involved human capital as possible. However, we do not do that as much as we should because there are other forms of "value" we can get by not locking up our innovation and human capital. In previous decades, Japan, Korea, and Taiwan have all followed practices similar to what China does today. The growth of native industries may have hurt America's ability to compete in these markets (and even in America itself), yet companies like Sony, Samsung and others have brought value directly to American consumers and encourage more innovation now that they actively compete with American companies in the innovation game.

Right there in the first paragraph (emphasis added):

> The most important story of 2014 that most people ignored was the Chinese economy overtaking the US economy. (This is using the purchasing power parity metric, which incorporates differences in the price of goods, but the Chinese economy will overtake on other metrics soon enough.)

"Other metrics" does not include GDP per capita. That seems to me something you might not want to overlook when comparing the US and China.

I'm sorry but I couldn't get past the first paragraph. It's common misconception that people claim China's economy has overtaken US, it's really a clickbait for media outlets last year.

Yes, using a calculation called "purchasing power parity," it looks as if China has passed America. But that calculation is a statistically manufactured one, which supposedly makes up for different costs of living in the two countries. In short, it doesn't measure anything that's real, but a concept that some economists — and certainly not all — believe is important. It's a phony comparison using a made-up number. So what do the numbers show when you compare real apples to real apples? Real U.S. GDP this year will be about $16.27 trillion, adjusted for inflation, according to data from the U.S. government, World Bank and IMF. China? It will be less than half that, about $8.06 trillion. Not only has China not passed the U.S., but it's quite possible it never will. China's population growth is heading for a dramatic Japan-style collapse, which will slash economic growth dramatically in coming years. Growth has already slowed from 10% a year in the 1990s and 2000s to 7% — and it's likely to fall further from there. That's not all. The real measure of a nation's standard of living, productivity and, ultimately, the size of its economy is GDP per capita. What does that tell us about the difference between the U.S. and China? This year, America will have per person output of $50,979 in real terms, China $5,947. So the average American is nine times more productive than the average Chinese. So don't panic. The U.S. isn't No. 2, except in certain IMF statisticians' minds. Nor will it be soon. This is from a credible research article.