Note: I have updated this post here.
Excellent post from James Fallows pointing out that a new Pew report shows that 44 percent of Americans think that the “top global economic power” is China. Just 27 percent of respondents correctly picked the U.S.
Yes, China owns a lot of American T-bills. And yes, China’s economy is developing rapidly. But China’s economic might is not as great as many people assume.
From an Oct. 22nd story in the Economist headlined “The Odd Couple: America should be much more confident in its dealings with its closest rival”:
China’s economy is still less than a third the size of America’s at market exchange-rates. Its GDP per head is one-fourteenth that of America. The innovation gap between the two countries remains huge. America’s defence budget is still six times China’s.
(Emphasis mine.)
Check out Fallows’s post (linked to above) for more info.