Exports and Imports

• China is a huge exporter of manufactured goods, which is both good for American consumers and bad for the American unemployed. China's economy overtook Japan's to become the second largest in 2010, but at that time, Japanese GDP per person was somewhere around $40,000, whereas in China it was more like $4,500. This GDP-per-person gap means that labor costs remain low in China; thus the cost of exported goods also remains low, and the prices for American consumers remain low. But manufacturing jobs have left the United States and headed to China, where costs are lower, which has contributed to unemployment in America.
  
  

Currency

• Manufacturing costs are kept low in China, in part, by currency fixing on the part of the Chinese. Currency fixing keeps the yuan, which is China's currency, undervalued. Peter Morici, an economist at the University of Maryland, is quoted as saying in a CNN article that this practice helps to keep Chinese products artificially cheap in American stores and also makes American exports too expensive for the Chinese market. This situation is good for American consumers but bad for American manufacturers.
  
  

Resources

• According to the Energy Information Administration, coal use in China, which was 27.7 quadrillion Btu in 2007, will increase to 72.2 quadrillion Btu by 2035, while American consumption of coal is only expected to grow by 0.4 percent annually over the same period, to a total of 23.1 quadrillion Btu. This huge increase in resource consumption is not limited to coal and indicates what will no doubt be increased competition for finite natural resources as growing economies, including China and India, demand larger percentages of a global resource market. This increased demand on a finite supply will also increase the price of many natural resources.
  
  

Top Spot

• Methods of comparing the Chinese and U.S. economies vary, but one estimate is that the Chinese economy will surpass the U.S. economy as early as 2016, which will help to underscore the large differences of the two economies. The loss of the top spot will not hurt the American economy in any measurable way, but it will be, in many respects, a psychological blow to the United States, which has held the top spot since the 1890s. It will be seen as the event that marks end of the era of American hegemony, just as America overtaking Britain in the 1890s was seen as a major event in the demise of the British Empire.