Ranked:The World’s Strongest City Economies by 2050

[New Brisavoine]

What you fail to take in consideration in the equation is the very high inflation in the US, which has inflated the US GDP, but has not been reflected in exchange rates, which is a de facto devaluation by the renminbi. Real GDP growth figures don't lie.

[iheartthed]

Originally Posted by New Brisavoine

What you fail to take in consideration in the equation is the very high inflation in the US, which has inflated the US GDP, but has not been reflected in exchange rates, which is a de facto devaluation by the renminbi. Real GDP growth figures don't lie.

No... U.S. inflation was normal until after COVID supply chain disruptions in 2020.

[jmecklenborg]

Germaine to the topic of this thread, here is some guy's list of the current Top 10 finance cities:
https://www.youtube.com/watch?v=xioLA8YKwqc

1. New York City
2. Singapore
3. London
4. Chicago
5. Switzerland (combined)
6. Hong Kong
7. Shanghai
8. Sydney
9. Miami
10.Toronto

He argues that Hong Kong and Singapore have essentially switched places in the last 10 years as China has cracked down on Hong Kong.

And let me propose this question to this forum - if you have $100,000 to place in a savings account or to invest, are you really going to trust all of it to a bank in mainland China?

It's also important to note that 9 of the 10 cities listed are former British colonies. England figured out the necessary accounting and regulations to run an overseas empire over 100 years ago.

China is building solar panels and electric cars but.....do they do proper accounting? No, everything they report has to be interpreted - financial, population, everything. The centuries-old habit of lying and scheming is holding the place back to this day.

[New Brisavoine]

Originally Posted by iheartthed

No... U.S. inflation was normal until after COVID supply chain disruptions in 2020.

Sigh...

2010-2019, yearly average:



2020-2026, yearly average:



The higher US inflation in the 2020s had not been reflected in the exchange rates (the US dollar has remained high despite a higher inflation in the US than in either Europe or China), which largely explains the currently inflated US GDP when compared to European and Chinese GDP. When the US dollar falls, as it will inevitably eventually, European and Chinese GDPs will suddenly be much higher compared to US GDP. It happened many times before.

[iheartthed]

Originally Posted by New Brisavoine

Sigh...

2010-2019, yearly average:



2020-2026, yearly average:



The higher US inflation in the 2020s had not been reflected in the exchange rates (the US dollar has remained high despite a higher inflation in the US than in either Europe or China), which largely explains the currently inflated US GDP when compared to European and Chinese GDP. When the US dollar falls, as it will inevitably eventually, European and Chinese GDPs will suddenly be much higher compared to US GDP. It happened many times before.

China's growth relative to the US economy was slowing prior to 2020. Between 2010 and 2015, China added 20% of US GDP, but between 2015 and 2020, China only added 9%.

[Crawford]

Originally Posted by New Brisavoine

When the US dollar falls, as it will inevitably eventually,

The USD did fall relative to the EUR. Growth was still much stronger. Now the EUR is falling relative to the USD. Growth will still likely be much stronger. USD and EUR overall have been close to parity for a long time. It has been ages since I didn't just compute them 1:1 when traveling.

[jmecklenborg]

Also, the U.S. economy is uniquely domestic, as a percentage:
https://en.wikipedia.org/wiki/List_of_countries_by_trade-to-GDP_ratio

There is a ton of foreign trade, obviously, but the overall economy is so gigantic that it constitutes a relatively small percentage.

[New Brisavoine]

Originally Posted by Crawford

USD and EUR overall have been close to parity for a long time. It has been ages since I didn't just compute them 1:1 when traveling.

The USD is currently largely overvalued (for various reasons). If the exchange rate reflected the actual cost of things (how much does it cost to buy a Big Mac, get a hair cut, rent a 2 bedroom flat in the city center, etc) then:
- compared to France: 1 € should be worth 1.55 USD (current exchange rate is 1.12 USD)
- compared to Germany: 1 € should be worth 1.39 USD
- compared to China: 1 USD should be worth 3.28 RMB (market exchange rate is currently 6.70 RMB)

The gap between the purchasing power of the USD and the market exchange rates has become quite large. Such a gap cannot last forever. Something will have to give at some point. What the trigger will be, neither you, nor I, can predict it. But it will happen, sooner or later. I remember when 1 € was worth 1.65 USD. It wasn't so long ago.

[McBane]

As mentioned in my last post, the Chinese have the upper hand because their leadership is playing the long game and committed to being the number 1 global super power. Chinese leadership doesn't worry about the next election, they don't care if today's policies are opposed by the public, or what the media will say. The Chinese government is laser focused on achieving their goal.

Whereas in the US, our leadership is fixated on two things only: 1) staying in power and 2) screwing the opposition. Nothing else matters (and don't pretend it's only one side). That's why we can't fix our infrastructure, social security, healthcare, etc. There's simply no political will to do anything that might endanger re-election or give the opposition a win.

Hell, we can't even decide if we want to remain a super power (MAGA/America First policies). And it certainly does feel like that as we've become more "democratized" - e.g., primaries, social media, etc. - our government has become more dysfunctional and less compromising. It's good to be responsive to the people but, honestly most of the time the people are idiots.

[New Brisavoine]

Originally Posted by McBane

our government has become more dysfunctional and less compromising.

I beg to differ. America's political system has been dysfunctional during most of its history: slavery-antislavery infighting that led to the civil war, assassinations of president Garfield in 1881 and president McKinley in 1901, 'robber barons' and the insane level of corruption in US politics from the 1880s to the 1930s, absolutely lunatic wave of isolationism in the early 1940s while Hitler was conquering most of Europe and Japan building bases to attack America, McCarthyism after the war, civil rights' pandemonium with the murders of Martin Luther King and two Kennedys, Watergate, Contras, Monica Lewinsky and Newt Gingrich, Rumsfeld and — Cheney. We tend to think of moments like 1942-1945 when America was united and had good senses, but it's the exception, not the norm. Our time is no worse, it belongs to all those periods of insanities.

What saves America is its government is small, unlike European governments, so it doesn't really matter if the government is insane, the private sector keeps the country going.

[jmecklenborg]

Originally Posted by McBane

As mentioned in my last post, the Chinese have the upper hand because their leadership is playing the long game and committed to being the number 1 global super power.

No, the #1 goal of the Chinese Communist Party is to remain in power. They need the whole "we're going to be #1 by 2049" thing to justify to their people why they treat them like complete —.

You can go get a job anywhere in the United States where they back shipping containers up to the dock and you unload the boxes that somebody loaded a few weeks earlier in China. You as a U.S. citizen unloading that container are paid much more, enjoy far more rights, far more personal freedoms, and work in a much safer environment.

Chinese leadership doesn't worry about the next election,

They worry about being overthrown and killed by revolutionaries.

they don't care if today's policies are opposed by the public, or what the media will say.

They are the media. They recently killed off independent media in Hong Kong.

Whereas in the US, our leadership is fixated on two things only: 1) staying in power and 2) screwing the opposition.

Except the U.S. is fundamentally different because most U.S. business and political leadership is comprised of the counter-elite. Everything turns over every 15-25 years. Old money families hold almost no power in business or government. Meanwhile all of the leadership in China springs from a small group of families. New Chinese business leaders must be contained because they cannot be allowed to challenge the ruling class.

Nothing else matters (and don't pretend it's only one side). That's why we can't fix our infrastructure,

China keeps building dead-end railroads and highways into mountain ranges that will never make money and apartment buildings that will never see residents. They do this so they can show the people that they're doing something.

There's simply no political will to do anything that might endanger re-election or give the opposition a win.

The U.S. is extremely stable because elements of control keep bouncing around between different entities. New people and new industries keep appearing. There is almost no such thing as a family dynasty in politics or business.

I'm 1,000 feet away from the vice president of the United States as I type this post. He came from complete obscurity and his rise was sponsored by people like Peter Thiel who likewise rose from obscurity. Everyone in the central Chinese government is from families that have been in the Chinese government since 1949. They don't trust anyone from the outside.

[craigs]

This is no longer a "City Discussion." Perhaps a mod should move it to a more appropriate subforum.

[mhays]

ALTERNATIVELY how about deleting the obvious political posts and keeping the ones that relate (at least indirectly) toward our cities, or China's, rising and falling. Really just a few at the end.

This has been a great thread and doesn't deserve the dungeon. City Discussions needs good content.

[Age of Whamsies]

Originally Posted by jmecklenborg

Also, the U.S. economy is uniquely domestic, as a percentage:
https://en.wikipedia.org/wiki/List_of_countries_by_trade-to-GDP_ratio

There is a ton of foreign trade, obviously, but the overall economy is so gigantic that it constitutes a relatively small percentage.

Simple trade-to-GDP is not a good metric for economies that are highly financialized. If you take out the financial services sector from our economy, the rest of the economy is much more trade dependent. As someone who works in manufacturing, I can tell you we gave a lot more of our economy away to China than most people think.

[isaidso]

Originally Posted by iheartthed

China's economy has actually been losing ground to the U.S. this decade. And this during a period when the U.S. economy hasn't exactly been firing on all cylinders in its own right.

China's GDP as percentage of U.S. GDP

2000: 12%
2005: 18%
2010: 41%
2015: 62%
2020: 71%
2025: 64%

According to Statista China's GDP is projected to be about 69% of the U.S. GDP by 2030, which is still below what it was in 2020. If China had remained on its pre-2020 trajectory, it would have overtaken the U.S. economy by now. But I don't know if they can close the gap by just being an exporter economy. And even if they do eventually overtake the U.S., I wouldn't bet on that happening within the next 20 years.

Japan's economy peaked around 70% of the U.S. economy in 1995, so China is exactly where Japan was 30 years ago relative to the U.S. economy.

The data is accurate but it's wishful thinking to assume that China and Japan are comparable. China has 10 times the population of Japan, massively more resources at its disposal, and a centralized government that has far more control over national economic strategy. One only need study or visit China to see that it's not a matter of 'if' China will become the world's dominant power, but 'when'.

Throughout history, citizens of every super power engage in mass delusion that their country will remain on top. The almost religious focus on GDP Nominal (USD) may hide the shift in global power for awhile but it's clear that China will zoom ahead of the USA, if it hasn't already. Americans just haven't come to terms with it yet. The Trump regime, and its astounding ability to torpedo the US, is only speeding up the transition.

It speaks volumes that the Western world, a block that has bolstered US hegemony for decades, is now decoupling from the US as fast as it can. You've hit the iceberg and we've boarded the lifeboats.

[Age of Whamsies]

This conversation has kind of sucked from the get go, and has been almost not worth participating in, because the original list (like most lists of this sort) never corrected GDP for purchasing power, and is therefore meaningless. A lot of the arguments in this thread boil down to that confusion. Nominal GDP in US dollars means nothing in countries that don't use US dollars.

What matters for everything we actually care about in our conversations on this happy little website (living standards, military capability, the ability to build infrastructure... skyscrapers... etc) is actual economic activity; what is actually happening and being produced on the ground in a particular place.

Just think about it for a second (using a deliberately extreme thought experiment): imagine a country with no people, and an entirely robotic supply chain. The only things it imports are raw materials and the only things it exports are extremely cheap finished goods (cheap because, again, there is no labor in this country. Also it is powered totally by renewables). The whole country is just one giant vertically-integrated factory. All the following prices are in 2026 US dollars. Per year, this country/factory makes 1 million electric cars (which cost $200 each), 10,000 5th gen fighter jets (which cost $10,000 each), and 1 million FPV drones (which cost $50). Using these numbers, this country would have a nominal GDP of... $350 million. But if we wanted to produce all these same things in the US in 2026, at current prices, we would require at least 5,000 (probably more like 10,000) times more dollars to change hands, because our economy is significantly less efficient than this hypothetical economy. Put more succinctly: we are worse at production than this country, so producing the same things as them is more costly for us. Do we see the problem now?

The best measure (one of the ONLY non-— measures) we have of actual aggregate economic activity is GDP at purchasing power parity (PPP). Here is the list of countries by GDP@PPP: https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP).

As you can see, this list looks a little different than the list we often see. China is already by far the world's largest economy, and Russia is the 4th.

With that out of the way... back to the topic of city economies

Speaking of Russia, Moscow is always severely underrated on all these types of lists for political reasons (why do we do this? its so childish). As the primate city of one of the world's largest economies, and with a metro population of over 20 million, Moscow has a massive economy. At purchasing power parity (rubles to dollars), the Moscow metropolitan economy is somewhere around $1.8 trillion, and is growing despite (and to some extent because of) the war. If you then correct for the fact that Moscow is more expensive (30-40% more expensive) than Russia on average, then the number shrinks to about $1.35 trillion.. just a bit smaller than the economy of the LA area.

[New Brisavoine]

Originally Posted by Age of Whamsies

As you can see, this list looks a little different than the list we often see. China is already by far the world's largest economy, and Russia is the 4th.

To claim that Russia is the 4th largest economy in the world is preposterous. For China, it makes sense to use PPP, because China mostly produces what it consumes. Russia, on the other hand, does not have high-end industry, it needs to import those, and it cannot buy them on international markets at PPP value. It has to buy them at market exchange rates. PPP inflates the Russian GDP because Russia has lots of natural resources that are cheap within its domestic market, but as soon as it needs to use, say, sophisticated machine tools, chips, computers, etc, its economy suddenly shrinks to its current dollar size, at market exchange rates, because it can only buy so much of its products with its weak rubble.

China doesn't have this issue, because they now produce most of these sophisticated products, even the most advanced chips now.

[mhays]

The US will eventually fall out of first place. But that doesn't mean China is destined to take its place. They have some advantages, including huge spending on infrastructure, innovation, and alliances, but they also have a serious aging problem and a growing worker/dependent imbalance. We certainly don't know enough, which is because they don't really report on a lot and the reports that do exist are suspect.

[muppet]

I recently returned from rural Romania, and it was interesting to see how people lived out there. They still had the whole West is Best thing going, and sure in many regards, like the ability to strut designer labels and take selfies on holiday, or get into long conversations about pressing family issues / launch into international espionage in their neutral airbnb-inspired apartments. Stuff beamed to them on social media and TV at every turn.

But in terms of lifestyle and ownership they had things I could never, ever have in a lifetime of running several jobs. -A garrulous home, an array of fluffy pets big and small, a garden, a car but a short walk to all amenities, strong community, a haircut every few weeks, organic food as a given and lots of leisure time. Even stuff like buying flowers every week and real artwork on the walls, is too expensive for middle class lifestyles back home.

I went to a poor commie block area too, and the people looked like they had good enough lives despite their poverty, hanging out chatting all day, kids playing, a river and forest in front which people used as a park, everyone dressed well and well fed, able to afford going to the local pub and restaurant. Owning their homes, larger than mine being rented forever more. A playground actually being used, that kinda thing.

In Bucharest and I'm sure other big cities this equivalent project would be ghastly, but the difference is the urban poor would probably be 'richer' than the ruralites too -just not in lifestyle, and not in real terms. Grass is always greener. Is a haircut in the countryside, really only worth a fraction of the equivalent result from a salon in the big city?