There are different reports and predictions about China overtaking the US economy in the next 6 years. Some say that it is never going to happen in the next 50 years. With the pace at which the Chinese economy is growing, many think tanks suggest that China will replace the US economy by 2028 as being the largest market in the world. India is supposed to be the third-biggest economy after China and America. Apart from these predictions and insights, we all need to admit that the international economic environment is changing. The USA is not always going to be the leader in the market. Sooner or later, change is going to happen and China is going to replace the US economy. But seriously, Will China replace the U.S. economically?
Will China Replace the U.S. Economically?
While the U.S. is the world’s leading economic power, China may soon exceed it in terms of gross expenditure – that is, money spent by consumers, businesses, and government on goods and services.
According to a report from the International Monetary Fund (IMF), China had to overtake the U.S. as early as 2019 or 2020 when it comes to buying power parity.
The IMF defines this concept as “the number of goods and services that a currency would buy in one country relative to what it could purchase in another country.”
Will China replace the U.S. economically? In terms of nominal gross domestic product, the IMF said that China will not replace the U.S. until 2050, in part because of the size of America’s economy – which is 10 times larger than China’s – and also because of China’s population, which is four times larger than the U.S.
It should be noted that according to a recent study by consulting firm PricewaterhouseCoopers (PwC), China is on track to become the world’s number one economy by 2030.
The rapid growth of China’s economy is raising a lot of questions about whether it will eventually replace the U.S. as the world leader. The IMF report certainly stirred up some speculation on this topic, but many analysts are skeptical of the claim that China will bypass the U.S.
This is partly because, even as China’s gross expenditure grows substantially in relation to the U.S., America will maintain a huge advantage when it comes to gross domestic product per person (GDP/person).
Will the US remain Richer than China?
Yes, America will remain richer than China for the next 50 or more years. There are many factors involved that support this prediction. China hasn’t had one of its own Fortune 500 companies since 1999 and there is no obvious candidate to fill that void
Will China Replace the US Global Role?
But will China replace the U.S. economically? One of the most complex issues in global politics, currently, is how to deal with China. It is rapidly increasing global role. Many predict China won’t replace the US in terms of global power as a superpower. However, that doesn’t mean it won’t be hard for them to overtake Russia or even Great Britain.
Some argue that China cannot be a superpower, because “The Chinese are not yet ready for a superpower status,” or “China needs to achieve internal harmony and social stability before it can be a superpower.” However, such statements are reasonable as long as we set aside the imperialistic view of China as ‘an emerging superpower.
The question then becomes: Who will emerge as our successors? Should we prepare for new world order? How can we make sure our world order remains relevant and effective against emerging threats from Asia?
Is the Chinese Economy stronger than US Economy?
Central Bank of China and the People’s Bank of China are issuing Renminbi. So, technically it does not depend on any other country to be able to print money. With a population of nearly 1.4 billion people, China is the world’s most populous country and its second-largest economy.
China has a very large manufacturing base and exports goods to other countries such as cars, electronics, toys, etc. In 2011, healthcare spending in China increased 13% over 2010 levels to $289 per person. One estimate saying that it will rise at an average annual rate of 12% for at least 5 years.
Will China Replace the U.S. Economically?
Many experts have been predicting the rise of China as a superpower for some time now. After the Great Recession, there was a sharp increase in Chinese economic growth. Recently, western companies are starting to test the waters by opening factory outlets in China.
The rising prominence of even non-electronic services such as hospitals is also pointing to China’s future. It is predicted that Chinese influence will loom large over international commercial affairs for most markets during this century. It is due to its high-speed economic development and willingness to accept new technological innovations from other nations.
A common prediction is that China will surpass the US in strategic influence by the year 2025.
Firstly, most powerful nations have been exporting their military technology and expertise to less-developed nations at the expense of their own defence. The US has been willing to share its world-class technologies and know-how with both allies and rivals alike.