On other hand, the US are trying to slow China's rise by hurting key industries.
This is a geopolitical struggle. The US cannot win because China is bigger than they are and so will overtake them sooner or later, but they can slow things down to maintain their dominance as long as they can.
They (the USA) fucked up Japan pretty bad. Throughout the 70s-80s the USA was fearful of the rise of Japan, their incredible ability to usurp American businesses, and their growing trade deficit surplus, which they then rolled back into US T-bonds. From an American perspective, Japan was in the 70s what China is today.
In the early-80s, the Yen-to-dollar ratio was really high. This kicked off an inflationary asset bubble within the country that lasted for several years. Starting in 1985, the yen-to-dollar ratio collapsed, falling by half from mid ¥200s in just two years and reaching a low of ¥85 by 95.
Japan entered the Lost Decade as a result of this situation. The lost decade became two, then the GFC happened, bringing it to three decades.
It is suspected that this was the result of an intentional attack on the Japanese economy by US officials with the express intent to curb Japan's rising economic power.
China has many advantages that Japan doesn't have. It's not a given that the same thing will happen.
I believe this is commonly referred to in geopolitics as the Plaza Accord.
There are smaller countries that have a higher GDP on average. Although some of those are suspect in reality; Ireland's is higher, but no one thinks of Ireland as especially more prosperous than say England. I wonder if it's because it's a tax haven.
Japan is not a small country at all. It's probably in the top 10 for population (off the top of my head, China > India > USA > Indonesia > Nigeria > Russia > Japan?). But there are no medium-to-large countries - population 35m+ - whose GDP per capita is within $10k of the US. The US is an outlier.
Moreover, I was talking about total GDP and not per capita. Among the current nations, only China and India have any hope of overtaking the US within our lifetimes (very slim for India). And that's only because of their gargantuan populations - per capita they'll still be far behind. For Japan to have overtaken the US in the 90s, they would have had to have a GDP per capita 3x of the US - which no country of any size has even today. Japan got really close, which is very impressive given its size.
> And that's only because of their gargantuan populations
All things being equal the relative economic and industrial power of countries is proportional to their population.
Unless a catastrophe befalls the US it's the countries with comparable or larger population that are threats. These includes the EU, actually, which is why the US are always wary of further EU integration.
With the likes of the EU, China, India, Indonesia, Nigeria, the US will pretty much inevitably lose their dominance and become one of the "big guys", key words being 'one of', not 'the' and not the biggest of the big guys, either.
Agreed. And this is why I said the US never had to seriously fear Japan surpassing them.
Japan's small population and land area means that they can never be world leaders in commodity production, such as oil, agriculture, mining, or timber - all of which are industries the USA performs really well in. Oil, specifically, is a crutch relied on by many nations to pad their GDP.
That's why Japan is so incredibly impressive. If you start removing commodities from the GDP comparisons (which are largely based on geographic luck), Japan, is and was an economic powerhouse.
Japan never needed to overtake the economy of the USA in pure GDP, since so much of USA GDP is in areas Japan could never compete in, such as agricultural output, they just needed to overtake the USA in a handful of key industrial areas. Which they did.
China has 4x the population of the US. The US have 4x the population of the UK.
Did the UK manage to stop the rise of the US? No. The US is much larger than any European country and thus it was inevitable that they became the dominant power (Europe helped by self-destructing, but economically the US had already overtaken European countries).
The only way the US can remain dominant is by trying to keep 'third world' countries poor. Once massive countries are on a strong development path it's just a matter of time and this is what's happening with China.
India also has the potential to overtake the US. In the future Nigeria could as well. This is actually an optimistic view as it assumes that no country is bound to be poor forever.