The rise of China from a poor, stagnant country to a major economic power within a time span of only 28 years is often described by analysts as one of the greatest economic success stories in modern times. From 1979 (when economic reforms and strong central control by the government were first introduced in China) to 2006, China’s real gross domestic product (GDP) grew at an average annual rate of 9.7%, the size of its economy increased over 11-fold, its real per capita GDP grew over 8-fold, and its world ranking for total trade rose from 27th to 3rd. By some measurements, China has become the world’s second-largest economy, and it could be the largest within a decade.

Most recent numbers show the U.S. gross domestic product to be about $8 trillion per year. China's GDP is a little more than $4 trillion. So, at present the U.S. economy is slightly less than twice the size of China's. At present, the U.S. IS the largest economic power in the world. But it is quite clear that if economic trends continue, China will surpass the U.S. in a very few years.

Having said that, one must consider where the two countries were a little as thirty years ago. And where most experts expect them to be in the future. While the U.S. is currently experiencing a period of economic decline, China's economy continues to grow at close to a 10% annual growth rate. Most economists project that China will surpass the U.S. as the world's largest economy in a decade or so.

From one perspective, China already dominates the U.S. Our political leaders have chosen to spend at a rate that far surpasses our national income, much for uses outside the U.S. and having nothing whatsoever to do with sustaining or growing our economy. The result of those political decisions, combined with China's focus on domestic affairs and growing it's own economy, is that China has accumulated a huge treasury while the U.S. has become the world's largest debtor nation. In fact, were it not for China's willingness to both lend and invest in the U.S., it's clear that our political agenda is not sustainable. In fact, our political agenda is already almost totally dependent on China as a source for financing.

One must keep these facts in mind when assessing the policies and decisions of our political leaders. Again, it's important to note that THE CHOICES MADE BY U.S. POLITICAL LEADERS IN RECENT DECADES HAVE PRODUCED ECONOMIC RESULTS THAT ARE NOT SUSTAINABLE.

Yes, size does matter. And I'm afraid we will find it will matter even more in the near-term future. Said more simply, our way of life and our ability to continue to continue to make the kinds of political decisions which we've made in recent decades cannot continue.