How possible is China’s economic dominance over the US in the next 10 years
Having analyzed the speech of the Chairman of the People’s Republic of China, Bloomberg agency predicted the economic domination of the country over the USA. Experts came to such conclusions after reading the development plan of China, designed for 2021-2025. Despite the fact that detailed information about the meeting of the Chinese government is not disclosed, some sources say that the country’s strategy is aimed at strengthening the technological sphere. Special attention is paid to innovative developments as well as environmental issues.
According to Bloomberg analysts’ forecasts, China’s GDP growth rate will remain at the current level in the near future. This will allow the economy to develop stably and overtake the USA for 10 years. The pandemic has significantly affected the processes in China, but even with such difficulties its economy managed to grow by 0.7%. And even earlier, the IMF noted that China will be the only country in 2020, whose economy will show an increase. GDP here grew by 1.2%, and according to forecasts, this year the figure will add 8.2%.
It should be noted that now the Chinese economy is in second place in the world by volume, the U.S. takes first place. However, if the scenario of analysts is justified, we can expect changes, which may lead to even greater tension in the relationship between the powers.
At the same time, the rapid recovery of the Chinese market will benefit not only China itself. The pluses from this will be felt by the neighboring Asian countries. First of all, this statement concerns the increase in consumer capacity. In addition, shares of Chinese companies will rise in price, which will resume the demand at the exchanges.
As soon as quarantine restrictions in China ended, all efforts were focused on industry recovery. The authorities took a number of large-scale measures, which allowed the industry to grow to the highest values in the last 10 years. This had a favorable effect on the economy, which quickly moved to positive dynamics. The Business Activity Index in the country rose from 51.2 p.p. to 52.8 p.p. in July, which is the fastest growth since January 2011.
The increase in volumes in the industrial sector coincided with the automobile rush in China. At the end of summer, passenger car sales increased by 8.9%, which is a record since 2018. Thanks to all these factors, China has avoided the threat of technical recession, and was able to develop further.
However, despite the rapid growth, it should be understood that strained trade relations with the U.S. may affect the implementation of China’s development plan. Therefore, Beijing is extremely interested in establishing a trade policy with Washington.