Wishcasting is a slang combo of "wishful" and "forecasting." It refers to the act of presenting a desired outcome as reality, despite a lack of objective evidence supporting it. Essentially, it is wishful thinking disguised as analysis. And, at heart, that is what most US administration friendly talking points were in 2025 regarding American standing and power. The trade war hurt China but hurt Americans more: China ended 2025 with a record high one trillion-dollar global trade surplus while the USA was forced to backdown, pause further tariff hikes and is projected to have ended 2025 with a one trillion-dollar global trade deficit.
2025 was the first year since 1890 when you could say China was clearly the most important single economy in the world because it defeated the US in a trade war started by the US administration on its own terms.1 1890 was when China lost its spot as the world’s largest economy; lost it to the United States of America.2 China’s economic position translates to leverage in economic conflicts, and the world noticed. In a trade war, domestic production capacity and internal market size (PPP) matter more than currency-adjusted comparisons (nominal GDP). American policymakers who thought they could win a trade war were engaging in wishful thinking based on misleading nominal GDP figures or simply manipulating the US market to serve ends other than enriching the American people.
Looking at GDP numbers, the US looks dominant, but for the point of looking at how economic might translates into a competition, I think we should consider what is being measured. I do not mean that the numbers are wrong, I mean that their importance can be misleading. Let’s look at the Federal Reserve definition of GDP: Real gross domestic product is the inflation adjusted value of the goods and services produced by labor and property located in the United States.3
If the US Federal Reserve raises interest rates, the Dollar gets stronger. On paper, the US economy "grows" compared to Europe or China. But did American factories suddenly get more efficient? Did they produce more cars? Not necessarily. Let’s compare the United States, the European Union and the People’s Republic of China at ten-year intervals from 2005 to last year:
Nominal GDP
Country/Entity 2005 2015 2025
United States $13.04 Trillion $18.21 Trillion $30.62 Trillion
European Union $11.95 Trillion $13.66 Trillion $19.99 Trillion
China (PRC) $2.29 Trillion $11.06 Trillion $19.40 Trillion
2005: The US and EU were nearly equal. China was roughly the same size as the UK or Italy at the time. This was the unipolar moment when the US was truly a global hyperpower with no peers.
2015: The “Great Divergence” begins. The US pulls way ahead of the EU in dollar terms, largely due to the strengthening Dollar and the Eurozone’s slower recovery from the debt crisis. However, China’s economy had nearly quintupled (5X) in a decade.
2025: China has essentially caught up to the EU in nominal terms, while the US nominal figure has crossed $30 trillion, bolstered by significant price inflation and high-value service sectors, which makes the US look like a juggernaut.
However, another way to measure economies, and the one I think that is most important for Americans, is purchasing power parity, which the International Monetary Fund explains is: the rate at which the currency of one country would have to be converted into that of another country to buy the same amount of goods and services in each country.4 Put another way, it is hard to compare the economies of different countries. It can be done, but just because a thing can be done, does not mean the process is simple. Some things remain complex because there is a limit on how simplified you can make them, and you have to do the work. So, economists and financial statisticians have to compare by converting local money into a single currency like the US Dollar. Most people use "market rates," meaning how many dollars does X thing cost in say Nigeria versus Italy, but this can be misleading because prices for things like a ride in a taxi are much higher in rich countries than in poor ones. To get a clearer picture of how much people can actually afford, the IMF uses Purchasing Power Parity (PPP), which compares how many things—like a hamburger—you can actually buy with your money such as The Economist’s Big Mac index which has been going on since the Reagan years. The idea is that McDonald’s is a global chain, so measuring how many Big Macs someone can buy with X amount of their own currency in the USA or China or Germany is a good measurement because the thing being measured and the company involved are the same, so you are comparing Big Macs to Big Macs and not apples to oranges.5
Now, if we count purchasing power parity, we get these numbers for the same years:
Country/Entity 2005 2015 2025
USA $13.04TR $18.21TR $30.62TR
EU $12.35TR $19.45TR $29.18TR
PRC $6.53TR $19.72TR $41.02 Trillion
China, the US, and the EU were basically equal in 2015, and, in the post 2017 era, China dominated. For example, in a contest where countries urgently needed to secure resources against another country, and this would directly translate into their ability to settle political differences using other means, the Chinese could outspend America, something no country has been able to say since the 19th century. China is effectively a $41 Trillion economy—nearly 35% larger than the US in terms of actual output. The EU isn’t “failing”; it is more efficient value for money. It produces 95% of the US output while its citizens pay significantly less for the basics of life. Luxuries will not matter to a population who has little hope of ever enjoying them.
Looking at the International Monetary Fund numbers, the Communist Chinese control 19.8% of the world economy, the European Union controls 13.7% and the USA controls 14.5%. 19.8 is more than 14.5. Some want to take comfort in per capita measurements of China’s population/GDP versus the USA where America’s lower population makes it look stronger. That is not how you fight wars and buy weapons. If one country has 10 riflemen with 10 bullets each and ours has 3 guys with 15 bullets each, we have more bullets per capita but they still have 100 to our 45 and we are in trouble. More is still more, and it cannot be wished away. On other fronts, China has also pulled ahead.
Electric Vehicles —The Hungarian Dilemma
The USA based Tesla, led by Elon Musk, is getting smoked by China’s BYD and is only kept afloat by trade barriers keeping perfectly safe Chinese EVs that are sold in Europe, out of the American market.6 BYD sold 2.26 million cars last year and Musk only sold 1.64 million, a difference of over 600,000 vehicles globally. BYD was able to make an EV that effectively cost $15K and Musk could not or would not. But to put this in perspective, I will use a neutral market: Germany. In Germany the least expensive Tesla is the five-seat sedan Model 3 which retails starting at €36K, whereas BYD sells the four-seat hatchback Dolphin model starting at €19K. If you want go sedan to sedan, even with EU trade barriers on China, the BYD Seal performance model beats the performance edition of the Model 3 by 1200 Euros. That will change because Prime Minister Viktor Orban’s Hungary will host the first BYD factory in Europe, scheduled to open second-quarter 2026. This will be good for Hungarian jobs, but it will mean that BYD will be safe from most EU trade restrictions and well placed to crush Tesla in Europe. European consumers have no reason to pay more for less to a US based multinational corporation versus saving money with a Chinese company.
Artificial Intelligence
Wall Street, the City of London, Amsterdam, Riyadh, etc., are saying that artificial intelligence is the future. Chinese AI is more efficient than ChatGPT. Period.7 DeepSeek trained its flagship V3 model for around $5.5 million. Training ChatGPT 4 and similar models in America costs somewhere between $100 million to $500 million. DeepSeek also test as well and, in some cases, better at coding. If the Chinese did the same thing for 20 to 100 times cheaper, then the current American method is bloated.
Executive MBAs
While the value of many university degree programs has come under fire in the US in recent years, one domain where companies repeatedly say the degree and education matter are Executive Master of Business Administration programs. In the Financial Times rankings for 2025, no USA-only program ranked in the top ten globally, and the oldest English university in the world, Oxford is down to number 15.8 Number one was the China/US joint program of The Olin School of Business at Washington University in St Louis, which is paired with Fudan University in Shanghai, China. While that means both countries can claim top honors, the other rankings tell a different story. China-only programs took 4th and 8th place, and a program partnered with China—but not the USA—took 2nd place. A program including the US but not China took 6th place. And 5th, 9th and 10th, places included both the US and China. On their own and with partners, the Chinese programs outranked the Americans, but it was close.
Going back to the Olin-Fudan joint number one ranking, even when America wins, it wins because it is tethered to Chinese talent. Academically, China has to be seen as at minimum an equal, and one that appears on the ascendant while the global consensus is that the USA is on the decline. If forced by the Americans to choose between America and China, the other major powers may not give the USA the answer it wants.
The point is, Americans who look down on China or hope the Chinese will just collapse of their own contradictions, like the Soviets, are wishcasting, and wishcasting is futile cope.9
Extremely insightful and thorough, it is a great article!