The United States says that they believe China keeps the value of its currency, the yuan, artificially low. And a cheap Yuan makes Chinese goods more affordable in the U.S., while U.S. exported goods are priced artificially high, keeping them out of reach of the mainstream Chinese marketplace.
The evidence is seen in our trade deficit. China reported a $27.2 billion trade surplus in 2010 while the United States posted a $44 billion trade deficit. The United States is still the largest economy with an estimated $14.6 Trillion dollar GDP in 2010. In 2000, China was ranked 6th with a GDP of $1.2 trillion dollars, ahead of Italy, but less than France. Since, then China's GDP has increased five-fold to $5.7 trillion dollars, passing even Japan and ranking as the second largest world economy.
Over the past ten years, China's growth has far surpassed that of any other country. CNN has a great app that shows China's rise to its number 2 spot. China's growth rate has been near double digits for a decade and it is estimated that its growth in 2010 was 10.5 percent. This during a time when the growth rate of the U.S. was not even among the top 10 economies. The problem is not the growth of the Chinese economy, but the lack of growth in the U.S.
Years of deficit spending in the has saddled the U.S. with a heavy anchor, one which seems almost too heavy to lift out of the muck and mire of debt in order to move forward. We need to solve our debt crisis if we wish to remain the world's largest economy.
Yes, the U.S. is amidst a sea change as many of the G-20 emerging economies begin to compete at our level. But as interlinked as all countries are to the global economy, it is the lack of economic growth that has allowed the emerging economies to catch up with the United States. Fortunately, President Obama's National Export Initiative Executive Order March 11, 2010 puts the focus back on business growth through exports. The NEI goal is to double exports by 2015. So far, with one-year under our belt, U.S. exports are up 20%, and continues on track to meet the NEI goal.
|CNN Chart: "G-20 Nations at a Glance"|
Take a look at CNN's interactive chart here. Click on Size or Growth and then click PLAY. Watch as China have moved steadily from #6 to #2 in the size of their economy. Examining GDP per capita, you will see that China's average annual wage or GDP per capita is forecasted to grow from $996 dollars per year in 2000 to nearly $8,000 dollars per year, placing it on a par with Mexico, by 2015.