The United States currently competes with an economy that is as big as it is, and in some cases bigger, than it was when Great Britain was overtaken as the world’s largest economy in the 1870s.
This article looks at China’s track record of catching up to the United States. And even surpassing it in some economic competitions.
When will China overcome the US as more powerful economy
The world is moving towards a global economy. And China is quickly on the rise as the largest economy in the world. China has had stunning development throughout history.
In the past few years, the market value of goods and services generated by the economy (GDP) of China and the US increased at rates of just 6% and 8% respectively.
Currently, as opposed to the US, where GDP growth decreased to 4.5%, China’s doubled to more than 13%. China’s GDP increased as a percentage of the US GDP, rising from 5% to 66%. It’s predicted that by 2050, China will have a GDP of $24 trillion. Which will make it the largest economy in the world.
If current trends continue, China will likely overtake the United States within a few decades.
China’s population and economy on the rise
According to purchasing power parity, the criterion that the CIA and the IMF both agree on is the best one for comparing national economies, China is on its way to eclipsing the United States to take the top spot.
One of the reasons for China’s rapid growth is its large population and its growing middle class. Its population is about four times bigger than America’s.
As of 2016, about 1.3 billion people were living in China who are age 15 or older and who have an income above the poverty line. This is expected to grow to about 2 billion people by 2030 and 3 billion people by 2050.
China’s influence on the world’s economy
Nevertheless, being the second-largest economy in the world, China has a tremendous influence on international economic trends and policy.
Beijing, as well as the rest of the world, is still processing the implications of China’s 2.5% annual growth rate. Provided the US continues to develop at its current rate of 1.5%, with comparable rates of inflation, and a steady exchange rate, China won’t overtake it as the world’s largest economy until 2050, if ever.
China will need to keep up its research and development spending if it wants to surpass the US.
Moreover, China already spends more than Europe does—about 2.5% of its GDP—on research and development. In terms of researchers, bachelor’s degrees issued, and the number of publications in scholarly journals, China is on the drive to surpass the United States. These modifications reveal China’s remarkable rise over a few decades to become an economic superpower.
The international economic system has been completely rewritten as a result of China’s consistent “miracle economic development” during the past forty years. At an average pace four times that of the United States.
China’s technological advancement
The world of technology has been developing and expanding over the last few years, but will that expansion continue?
It is common knowledge that China and the United States have long engaged in competition for technological advancement.
According to Douglas McWilliams, the founder and executive vice chairman of CEBR, China has a “vast foundation of engineers”. However it lacks the imagination required to promote the “many ideas” that fuel the development of new technology.
Through carefully planned national initiatives to connect the nation, the Chinese government played a critical role in fostering its technology expansion.
More so, China has been advancing toward a new stage of growth during the past four years, but this has gone practically undetected by the outside world.
By enticing, coaxing, and frequently coercing Western and Japanese enterprises, it is subtly and purposefully transitioning from a prosperous low- and middle-tech manufacturing economy to an advanced high-tech one.
In several technology-based industries, including air travel, energy production, high-speed rail, information technology, and even electric cars, the Chinese government has been enacting new rules that aim to usurp technology from Western multinationals.
Could China overtake the world economy?
It’s challenging to predict that, but indicators like research and development investment, scientific publications, and patents have all demonstrated considerable increases. Presently, China spends a larger percentage of its GDP on R&D than several European nations.
However, another improvement will result from workers switching from employment producing lower-value products and services to higher-value goods and services.
Read also: Chinese President Xi Jinping at the Party Congress: “There will be reunification of Taiwan at any cost”