China as the New No. 1? Not Quite

Economic growth isn’t as high as billed, and besides, it doesn’t give the whole story

3 min read
illustration showing maps of China and U.S.
Illustration: Chad Hagen

Some milestones are anticipated for years. How many articles have been written on how China will surpass the United States to become the world’s largest economy by—take your pick—2015, 2020, or 2025? The timing depends on what monies we use. It’s already happened in terms of purchasing-power parity, which compares the economic product of different countries by eliminating distortions caused by fluctuations in the exchange rates of their national currencies. In 2013, China’s PPP-adjusted GDP was less than 1 percent behind the U.S. total, according to the World Bank. In 2014, China pulled about 4 percent ahead.

If you rely instead on the yuan-to-U.S.-dollar exchange rate, the United States is still well ahead, about 65 percent higher in 2015 (US $17.9 trillion versus $10.9 trillion). But even with the recent slowdown in Chinese GDP growth—from double digits to an official rate of about 7 percent a year and, in reality, less than that—it is still considerably higher than growth in the United States. It is thus only a matter of time before China becomes No. 1, even in nominal terms.

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How to Prevent Blackouts by Packetizing the Power Grid

The rules of the Internet can also balance electricity supply and demand

13 min read
How to Prevent Blackouts by Packetizing the Power Grid
Dan Page

Bad things happen when demand outstrips supply. We learned that lesson too well at the start of the pandemic, when demand for toilet paper, disinfecting wipes, masks, and ventilators outstripped the available supply. Today, chip shortages continue to disrupt the consumer electronics, automobile, and other sectors. Clearly, balancing the supply and demand of goods is critical for a stable, normal, functional society.

That need for balance is true of electric power grids, too. We got a heartrending reminder of this fact in February 2021, when Texas experienced an unprecedented and deadly winter freeze. Spiking demand for electric heat collided with supply problems created by frozen natural-gas equipment and below-average wind-power production. The resulting imbalance left more than 2 million households without power for days, caused at least 210 deaths, and led to economic losses of up to US $130 billion.

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