The Economist: China has surpassed U.S. in many economic indices
December 4, 5:54 pm
The Economist magazine pointed out in a recent article that in the 21 different economic indices including manufacturing output, export, fixed investment, China has surpassed U.S. by more than half.
The article also predicted when China will outperform U.S. in the rest indices. It pointed out that by 2014, China is expected to be the largest import country in the world and meanwhile has the largest retail sales. Nonetheless, U.S. still keeps great strengths in some of the indices, for instance, its capital in stock market is 4 times that of China and its national defense expense is 5 times that of China.
When Goldman Sachs first made prediction for the economic growth of the BRICs (Brazil, Russian, India and China) in 2003, it predicted that China would possibly surpass U.S. in 2041. But now the prediction is adjusted to 2027. And Standard Chartered predicted in 2010 that the surpassing year might be 2020.
The Economist estimated that the current GDP of U.S. is still twice that of China under market exchange rate. In the past ten years, the average annual GDP growth was 10.5 percent in China and 1.6 percent in U.S..The average annual inflation rate was 4.3 percent in China and 2.2 percent in U.S. respectively. Since China aborted yuan’s peg to the dollar, the average annual appreciation of yuan has been slightly over 4 percent.
The prediction towards the coming 10 years by the Economist was: the average annual GDP growth rates are likely to be 7.75 percent in China and 2.5 percent in U.S..The average annual inflation rates are expected to be 4 percent and 1.5 percent. Meanwhile, it is expected that yuan depreciate 3 percent each year. Considering these variables altogether, China is expected to outrange U.S. in 2018. If the actual economic growth rate is only 5 percent in the next 10 years (others unchanged), China will likely to outperform U.S. in 2021.
