China economy overtaking U.S. is increasingly unlikely: ex-IMF official (2024)

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China economy overtaking U.S. is increasingly unlikely: ex-IMF official? ›

"The likelihood of the prediction that China's GDP will one day overtake that of the U.S. is declining," Eswar Prasad, a professor at Cornell University and a former International Monetary Fund official in charge of China, told Nikkei in a recent interview.

It's difficult to predict the future of either the U.S. or Chinese economy. Sudden shifts in geopolitics or breakthroughs in technology would shift the picture. China could still have a chance to overtake its biggest rival. But based on current projections, this seems unlikely.

The US has pulled further ahead of China in the race for world's biggest economy, thanks in part to a vibrant American consumer. US gross domestic product rose 6.3% in nominal terms — that is, unadjusted for inflation — last year, outpacing China's 4.6% gain.

Actual growth seems below the official figures; there is substantial deflation; the housing market has yet to stabilize; and the domestic stock markets have fallen significantly. Domestic confidence is flagging, and foreign investment in 2023 was at a three-decade low.

Measured at market exchange rates, China's GDP was $18.3 trillion in 2022, 73 percent of the GDP of the United States and 10 times more than the 7 percent of US GDP it registered in 1990.

Consistent with these observations, we show that the timing of China's overtaking will be determined by the pace of US and Chinese nominal GDP growth and moves in the bilateral exchange rate. For a range of plausible assumptions, we find that overtaking occurs during the 2030s, most likely in the middle of the decade.

London's Centre for Economics and Business Research calculated that China would indeed become the world's largest economy for 21 years, before the US reclaims the lead in 2057, itself to be overtaken by India around 2081.

The United States is the undisputed heavyweight when it comes to the economies of the world. America's gross domestic product in 2022 was more than 40% greater than that of China, the world No. 2. Even more striking, U.S. GDP was over five times that of the next two largest economies, Japan and Germany.

China has at least a 70% dependence on about 412 items imported from the U.S. and allied countries, at a value of roughly $47 billion annually, according to the analysis. Beijing lacks ready-made homegrown alternatives for many of the items.

The United States of America, China, Germany, Japan, and India are the largest economies in the world in 2024, as per their GDP data. GDP serves as a key metric for assessing the magnitude of a nation's economy.

Who does China owe debt to? ›

[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).

China is not only saddled with debt and facing the need for belt-tightening. As the premier's work report acknowledged, the bureaucracy is riddled with inefficiency, waste (especially involving priority government projects), and corruption.

Updated October 2023

Singapore's economic freedom score is 83.5, making its economy the world's freest once again in the 2024 Index of Economic Freedom.

Using the first metric, Switzerland is the richest country in the world at an average per-capita wealth of around $685,000, followed by Luxembourg and the United States.

1- United States: Located in North America, the United States is the world's third largest and most populous country. It has once again surpassed China to become the world's richest country.

"It is unlikely that the Chinese economy will surpass that of the United States within the next decade or two," said Desmond Lachman, a senior fellow at the American Enterprise Institute.

The U.S., China and India may take turns leading the global economy this century, according to an analysis from the Centre for Economics and Business Research. The CEBR forecast suggests China could potentially take the top spot as the world's largest economy by gross domestic product as early as 2037.

This statistic shows the projected top ten largest national economies in 2050. By 2050, China is forecasted to have a gross domestic product of over 58 trillion U.S. dollars.