Post by ehsanulh125 on Jan 9, 2024 7:20:19 GMT
In the medium and long term, the size of the United States' economy can realistically be approached or surpassed by the economy of one country: China's. Predictions and prophecies have been made about the time and manner of this event for decades. Most recently, in November 2020, Xi Jinping, the President of the People's Republic of China, said that between 2020 and 2035, the country could double its gross domestic product (GDP), which would probably mean that China's economy would overtake America's in terms of size. Despite all these expectations, the realization of this somehow never came close. Recently, the economic processes and demographic changes of recent years have raised doubts among several economists and observers as to whether this will happen at all.
What are the conditions for a turn? What Country Email List are the conditions for this turn to occur, and what do the characteristics of the two countries tell us about this possibility? [1] China's population is currently about 4.2 times that of America's, so if its GDP per capita reached a quarter of America's, then there would already be a change of place at the top. However, in addition to economic growth, there are two other important factors that influence this process, which are much more difficult to predict than growth. This is the market currency exchange rate between the two countries, as well as the prices of the products and services of the two countries. Currently, these prices are for the most part even significantly lower in China than in America.
If the country's productivity continues to increase and approaches that of America, then the price level will also approach either through higher inflation or a stronger currency (or both). These two factors are not negligible, they can contribute to the catching-up of China's economy to a similar extent as (real) growth, and thus they together determine whether China's economy will overtake America's, and if so, when. The catch-up has stalled However, the above thought process is only the theory behind the catch-up process. The economic processes of recent years show a rapid slowdown of this. Of the three factors mentioned above, economic growth has been showing a downward trend for more than ten years, and in addition, new factors have recently appeared in the Chinese economy that slow down the catch-up in the short and medium term.
What are the conditions for a turn? What Country Email List are the conditions for this turn to occur, and what do the characteristics of the two countries tell us about this possibility? [1] China's population is currently about 4.2 times that of America's, so if its GDP per capita reached a quarter of America's, then there would already be a change of place at the top. However, in addition to economic growth, there are two other important factors that influence this process, which are much more difficult to predict than growth. This is the market currency exchange rate between the two countries, as well as the prices of the products and services of the two countries. Currently, these prices are for the most part even significantly lower in China than in America.
If the country's productivity continues to increase and approaches that of America, then the price level will also approach either through higher inflation or a stronger currency (or both). These two factors are not negligible, they can contribute to the catching-up of China's economy to a similar extent as (real) growth, and thus they together determine whether China's economy will overtake America's, and if so, when. The catch-up has stalled However, the above thought process is only the theory behind the catch-up process. The economic processes of recent years show a rapid slowdown of this. Of the three factors mentioned above, economic growth has been showing a downward trend for more than ten years, and in addition, new factors have recently appeared in the Chinese economy that slow down the catch-up in the short and medium term.