Will China really become the world’s leading economic power?
The tipping point in history has been reached; the curves are about to cross, and China will once again overtake the United States as the world’s largest economic power. But when? In 2014, China’s GDP expressed in purchasing power parity (PPP) surpassed that of the United States; the measure analyses a selection of common products and services from each economy to determine what it can purchase, excluding the impact of exchange rates. However, in a trading world, nominal GDP, when transformed into dollars, represents an economy’s true weight in comparison to others.
China strives to stimulate its sinking economy:
The slowdown in growth was developed during the Covid-19 outbreak, along with the real estate market crisis, China in a difficult situation: high youth unemployment, low consumption by persons involved in the future, and shrinkage. Weakness does not prevent important achievements such as electric carss. According to official statistics, the GDP expanded by 5.2% in 2023. According to the International Monetary Fund, GDP should exceed $18,560 billion (about €17,026 billion) by the end of this year.
Meanwhile, the US economy, which is recovering from inflation, remains at the forefront of technology and benefits from low-cost energy as the world’s biggest oil and gas producer. It has a 2.5% growth rate in 2023, with a GDP of $27,970 billion. This is a far cry from the period around 2010, when China saw 8% to 10% growth while the United States was in recession.
Aging population:
So, some venture to ask: Will China truly become the world’s top economic power? They point to Japan as an example, which stalled following a dramatic growth in the 1980s. For a long time, the assumption was that the curves will intersect in the 2020s and 2030s. However, by the end of 2022, Citibank experts predicted that the date would be in the mid-2030s. The Japan Centre for Economic Research, as well as economist Mohamed El-Erian, President of Queens’ College, Cambridge (UK), predict that China will never pass this figure.
In the Financial Times, September 2023. The Centre for Economics and Business Research in London predicted that China would become the world’s largest economy for 21 years before the United States reclaimed the position in 2057, only to be surpassed by India around 2081. Pessimists point to China’s difficulty in transitioning to a true consumer culture, as well as the burden of an already ageing population.