Who Has the World's No. 1 Economy? Not the U.S.

In some dimensions, China's lead is even larger. The country's manufacturing output overtook that of the U.S. almost a decade ago. Its exports are more than a third larger as well. American commentators may be slow to recognize China's economic supremacy, but the rest of the world is starting to wake up to the fact...

This doesn't mean China's population is the world's richest -- far from it. The countries with the highest income per person, in order, are Qatar, Luxembourg, Singapore, Brunei and the United Arab Emirates. But few would argue that Qatar or Luxembourg is the world's leading economy...

But there's good reason to think that China will overcome at least some of these obstacles. Economists Randall Morck and Bernard Yeung have a new paper comparing the histories of Japan and South Korea -- both of which climbed out of poverty to achieve rich-country status -- with the recent rise of China. They find that China's institutions are, broadly speaking, developing along the same path followed by its successful neighbors...