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Kai Ryssdal: It might help to think of a given country's gross domestic product, that is the size of its economy, as a giant pile of everything it produces. All the widgets and widget repair services and widget shipping companies it has. Today, the Chinese pile officially took over second place. A report of slower than expected growth in the Japanese economy dropped Tokyo down to third place. The American pile? Two to three times bigger than China's. Depending how you measure it.
From Washington, Marketplace's Scott Tong reports.
Scott Tong: A soulless economist could quibble with the GDP numbers. They're not adjusted for purchasing power or seasons. But make no mistake, China is springing forward at a 9 percent clip. Japan: 0.4. China's transformation began three decades ago.
Clayton Dube at the University of Southern California remembers the early 80s. He married a Chinese national. And at the time...
Clayton Dube: The standard list of items that you would prepare for your bride would be three things that go around: a watch, a bicycle and a sewing machine.
Three valuable things back then. Today, they're everywhere, thanks in large part to growth from foreign investment, says former IMF economist Desmond Lachman. As for Japan, he says its economy has fallen behind China, for good.
Desmond Lachman: Its population is aging. You've got birth rates that are very low. It means fewer workers relative to their aging population.
The World Bank thinks China will slow down a bit. But even so, it may grow at a 6 to 8 percent rate for years, which would help all its people. Divided by population, income per capita remains a fraction of that in America. Going forward, Chip Chaikin at the private equity firm Bluepoint Capital Partners is optimistic. He's betting on Chinese shoppers.
Chip Chaikin: Maybe it's because we've all just recently given up hope on the U.S. consumer. But I think there is a lot of optimism in the Chinese consumer. And part of it is really the flip side of what you see in the U.S., where our consumer over-levered. You know, China is still very much the opposite.
They're just starting to borrow. And if you believe some of the prognosticators, they could pass the U.S. in total output in 10 years.
In Washington, I'm Scott Tong for Marketplace.