Recently, there's a hot topic in the economic circle: Can China's GDP really catch up with that of the United States? Some say that China's GDP has dropped from nearly 80% of the U.S. to just 59% now. This has surprised many people, who are speculating whether the U.S.'s suppression has taken effect. But is the truth really that simple?
Let's not rush to conclusions. It's important to know that there's often more than meets the eye when it comes to economic data. For instance, have you heard of the "70% curse"? It's said that once a country's GDP exceeds 70% of the U.S.'s, it will attract the U.S.'s special "attention." That's how Japan stumbled back in the day. So, is China now stepping into the U.S.'s minefield?
Back to the GDP issue, just looking at the numbers isn't enough. Exchange rates, inflation, and calculation methods can all affect the final outcome. Take the exchange rate, for example; when the U.S. dollar appreciates, the GDP of other countries, when converted to U.S. dollars, naturally decreases. Isn't that like magic?
So today, let's delve into whether it's the Chinese economy that's really struggling, or if someone is playing with numbers. What is the true economic strength of China and the U.S.? And how will things develop in the future? Let's unravel this mystery together!
Advertisement
When it comes to the economic rivalry between China and the U.S., it's quite a spectacle! A few years ago, everyone thought it was just a matter of time before China caught up with the U.S. But then, the situation took a 180-degree turn. The U.S. raised interest rates and started trade wars, causing China's GDP as a percentage of the U.S.'s to drop from 80% to 59%. What's going on? Has the Chinese economy really been knocked down by the U.S.?
Hold on, let's first discuss this "70% curse." To put it bluntly, the U.S. seems to view any country's GDP exceeding 70% of its own as a challenge to its dominant position.
When that happens, the U.S. is sure to pull out all the stops to deal with you. Take Japan, for example; in the late 1980s and early 1990s, the Japanese economy was at its peak! Its GDP once reached 69% of the U.S.'s. What happened then? The U.S.'s "Plaza Accord" sent the yen soaring, and the Japanese economy took a dive.
Now, looking at China, by 2017, its GDP had reached 66.7% of the U.S.'s. It seemed on the verge of breaking through the 70% threshold, could the U.S. sit idly by? So, starting from 2018, trade wars, technology blockades, and various sanctions followed one after another. At first glance, it seemed to work, didn't it?
But, folks, don't be fooled by appearances! We need to keep our eyes wide open and see clearly: China's Q1 GDP is 28.5 trillion yuan, with a year-on-year increase of 4.5%. Take a look at the U.S., it only grew by 1.1%. So why, when calculated, does China's GDP only account for 59% of the U.S.'s?
There's a big trick here: exchange rates! When the U.S. dollar appreciates, the GDP of other countries, when converted to U.S. dollars, naturally decreases. It's like your money hasn't changed, but when you go to the supermarket, you suddenly find that prices have gone up. So, this 59% doesn't reflect the true situation at all.Moreover, when it comes to GDP, the calculation methods vary from country to country. Take Russia, for instance; in 2022, its GDP decreased by 2.1% when calculated in rubles, but it actually increased by 24.8% when calculated in US dollars! Isn't that absurd? Russia is currently in dire financial straits; where is the sign of a 24.8% growth?
So, merely looking at GDP figures is akin to playing tricks. We need to consider the actual situation. In China, manufacturing, technological innovation, and international trade are all thriving. The United States' attempts to contain China with petty tactics are futile!
Take semiconductors, for example. The US tried to impose a blockade, but China strongly supported domestic enterprises in research and development. Now, breakthroughs have been made in many areas, rendering the US's tactics ineffective. Looking at trade, the US tried to strangle China, but China turned around and started doing big business with Russia and Middle Eastern countries. In 2023, the Sino-Russian trade volume reached a new high, which is a slap in the face for the US, isn't it?
At the end of the day, these petty moves by the US are just bluffing. Its own economy is on the verge of collapse, yet it's still thinking about how to suppress others. However, this strategy is becoming less and less effective. Especially now that the US has started to lower interest rates, what does this mean? The Chinese yuan is likely to appreciate, and the gap between China and the US in terms of GDP will surely narrow rapidly.
Look at the US over the years, with its domestic welfare in decline and the wealth gap widening. In contrast, China has been pursuing comprehensive development, and the living standards of its people are continuously improving. This is the true national strength! What's the use of a high GDP if the common people are suffering? It's better not to have it high.
Let's return to the matter of GDP. We must understand a truth: economic strength is not conjured up by numbers. The efforts China has put into technological innovation and industrial upgrading in recent years are not to be underestimated. From 5G to artificial intelligence, from new energy vehicles to high-speed trains, which of these are not impressive achievements? These are the real hard powers.
The US is really anxious now. Look at how it's instigating discord everywhere, engaging in geopolitical maneuvers, and even resorting to war. Isn't this a typical sign of a declining power? Knowing its good days are numbered, it tries every means to drag others down. However, this approach is doomed to fail.
There's an old Chinese saying, "For every foot of the way, the devil gains ten." No matter what tactics the US tries to use to contain China, China has ways to counter them. Take the recent chip sanctions, for example. The US thought it had China by the throat, but what happened? Chinese chip companies not only didn't collapse, but their research and development speed has actually increased due to this pressure. Isn't this the case of "when the old man lost his horse, who knew it was a blessing in disguise"?
In fact, what the US should be most worried about now is not how much China's GDP is, but when its own economic bubble will burst. Look at the US financial market over the years; it's like playing with fire. Printing money recklessly and engaging in rampant speculation—isn't this digging a hole for itself?
In contrast, China's development is steady and solid. "Stability" is the priority, but it does not lack ambition. This mode of development is truly sustainable. The US's approach of maintaining hegemony through financial manipulation and suppression of others will not last long.Conclusion
The so-called claim that "China's GDP has fallen to 59% of the United States" is merely a numerical game. The reality is that China's economy continues to maintain a robust growth momentum and has achieved breakthrough progress in many key areas.
The United States attempts to contain China's development through various means, but such actions are doomed to be futile. The rise of China is not based on the charity of others but is earned through its own efforts and wisdom. The future world order will surely be multipolar, and no single country can dominate the world.
For us ordinary people, it is better to focus on whether our quality of life has improved rather than obsessing over GDP figures. As long as our lives get better and the country develops stronger, that is the best "GDP."
Let us view the economic competition between China and the United States with a normal mindset. National development is a marathon, not a sprint. What we need to do is to be down-to-earth and continue to work hard, contributing our strength to the prosperity and development of our motherland. We believe that in the near future, China will stand tall among the nations of the world with an even stronger posture!
Comments