Forgotten is the gargantuan lead the U.S. still holds by just about every measure, even after China’s four decades of hypersonic economic growth. The total output of the U.S. economy was $20.5 trillion in 2018, significantly larger than China’s $13.6 trillion. Calculated on a per-person basis, the gap is even more glaring.
But these indicators don’t capture the true extent of the American edge. Derek Scissors, a scholar at the American Enterprise Institute (AEI), argues that a much better comparison is of national wealth—the value of real estate, stocks, and other assets—because it accumulates over time. By this metric, Americans remain significantly richer than the Chinese. In one estimate, U.S. household wealth was $106 trillion in mid-2019, Scissors noted in a recent report, compared with an estimated $64 trillion for China.
Nor is China challenging the American position at the core of global finance. Even though the size of Chinese stock markets continues to swell, controls on foreign share ownership and cross-border capital flows have relegated them to the international sidelines. In times of stress, such as the coronavirus pandemic, global investors don’t flee to Chinese bonds as a safe haven, but to U.S. treasuries. And despite the persistent worries about China’s currency contesting the primacy of the dollar, the tightly managed renminbi remains a bit player: According to data from the financial services network Swift, the renminbi was used in a measly 1 percent of international payments in April, compared with the greenback’s 48 percent share.