THE MATH OF HOW CHINA SURPASSES USA IN 5 YEARS

[beijingwalker]

Aha China overtaking USA thread ,dint see such threads this year.previously every other there used to be a thread on China overtaking USA

Every year we see some major overtakings happen in some fields, now what are left for US still hold the number one spot are very few.

 

[Beast]

China has almost 5 times the population with a huge workforce.

How you haven't passed us is more the question.
That answer was the vast majority in previous years were poor farmers.

Another loser comment. After know u are going to be beaten and all you can come up with is China is loser becos China shall take over US much earlier. Lol.

 

[Canuck786]

Only if their were no sanctions put on by USA and its allies on other aspiring nations to suppress them into poverty, the world would have been a better place long time ago. China just defied the principle and showed rest of the under developed nations that you can do it too despite all the adverse conditions subjected on you.

Bravo China and to rest of us I say, 'YES WE CAN'!

 

[Kai Liu]

I've been hearing about this for around 15 years, and back then it was still "in 5 years"...

Even if it happens, it will probably not be a good thing.

Aha China overtaking USA thread ,dint see such threads this year.previously every other there used to be a thread on China overtaking USA

Why not?
When somewhere with a GDP per capita barely $2,000 yet talking laud about superpawa 2020...

 

[AViet]

THE MATH OF HOW CHINA SURPASSES USA IN 5 YEARS

Most Americans cannot imagine China being the #1 economy, since they are constantly fed propaganda about America’s greatness and China’s imminent collapse. But the shocking fact is that China can very well surpass the U.S. by 2025. Here’s the math. I will try to explain it in a way that anyone can understand.

First, a quick clarification. When you hear the official GDP growth numbers, they refer to the “real” GDP growth, which is nominal GDP growth minus the inflation.

US GDP: Let’s assume that the US GDP growth for 2020-2025 is the same as the last five years.

Since 2020 is not over yet, we will roughly use IMF’s prediction that the real US GDP will shrink by 6.6%. I will say that the nominal GDP will shrink by 5%. In 2019, US GDP was $21.4 trillion. That means, US GDP this year will be $20.33 trillion.

The US GDP grew from $18.22 to $20.33 in the last five years. That’s an 11.5% growth. Generously assuming the same growth for the next five years, US GDP will be $20.33 x 1.115 = $22.7 trillion by 2025.

Thus, US GDP in 2025 = $22.7 trillion

(The math is generous, because the US is drowning in debt — which will be very likely $30 trillion by the end of 2020. A lot of bad things can happen in the US in the next five years).

China’s GDP: China is the only major country that’s expected to grow this year. In Q2 2020, China’s nominal GDP grew 5.5%! Let’s assume 4% growth this year (which means a real GDP growth of less than 2%). With a GDP of $14.4 trillion in 2019, China will end this year with $15 trillion.

Now, between 2015 and 2020, China’s GDP grew 36.7% (from $11t to $15t). Let’s assume a SLOWER growth rate of 27% for the next five years.

That means, China’s GDP will be $15 x 1.27 = $19 trillion in 2025.

Wait! 19 is less than 22.7!!

Yes, in this case, the chart would like this:

Yes, but here’s the catch. Assume that Chinese Yuan appreciates 20% over the next five years. Thus, the GDP will get a 20% boost, when you convert Yuan to US dollar. And, 20% of 19 = 3.8

Thus, China’s GDP in 2025 = $19t + $3.8t = $22.8 trillion!

China beats the US.

With stronger Yuan, the chart would look like this:

But … can Yuan appreciate? Isn’t China’s economy export oriented? And is the Yuan worth anything?

Well, China has changed a lot. Now, exports are only 18% of GDP. And don’t forget that imports are 15% of GDP. So, stronger Yuan means cheaper oil, coal, iron ore etc., which is a good thing for the world’s largest importer of raw materials.

Also, China is becoming a more consumption-oriented economy, where a stronger currency will be beneficial for the world’s largest middle class. For decades, the US has been complaining that China has artificially kept the Yuan low. Well, now the US can’t complain anymore.

Just in the last couple of months, the Yuan has appreciated 3% against USD. And Goldman Sachs predicts that the Yuan will appreciate 4% in the next year. This, it can very well recur for the next five years. Furthermore, foreign investors are gobbling up Chinese bonds, which will increase the value of Yuan (more demand = more value).

Chinese Yuan is also far more accepted around the world than Americans are led to believe. Already, China is conducting 37% of its cross-border transactions in RMB (Yuan). US dollar’s share in China’s trade has dropped from 92% to 56% in the last few years. In Russia-China trade, US dollar’s share is now less than 50%.

Last but the least, China will soon introduce its digital Yuan (“DCEP”) to the world. It’s already being used within China. This will be the beginning of internationalization of Yuan and a possible challenge to US dollar’s hegemony. Many countries would gladly use DCEP to avoid the probing eyes and sanctions of the US.

Thus, with reasonable growth and a strengthening Yuan, China can surpass the US by 2025. Don’t say you weren’t warned!

https://worldaffairs.blog/2020/07/20/the-math-of-how-china-surpasses-usa-in-5-years/

Do not behave like Indian, mate. Wait until 2025.

 

[bolo]

Wow this thread really ruffled two Americans, and one Singhaporean.

I haven't seen F22 and Harmotia being so emotional.

 

[Figaro]

People are too fixated on superficial GDP numbers ... sigh

 

[Mista]

Wow this thread really ruffled two Americans, and one Singhaporean.

How about you rebut my argument then. If the RMB is going to appreciate 4% against the USD every year, why aren't countries shorting the USD right now lmao.

 

[antonius123]

Remove a billion people from Chinas population they still would have more people. I don't see China overtaking US gdp per capita before 2060, whats your opinion?

If the gap between US economic growth vs China is 3% (assuming China economic growth is 5% vs US 2%), then yes it takes almost 37 years to be in GDP per capita parity.

But when China overtake US in technology, it could come faster, because the growth gap will be bigger. This is not to mention the special and disruptive event such as current covid-19 pandemic, as you can see in the time of war and catastropy the authoritative government like CCP can handle better.

 

[antonius123]

Are you saying the 100's of millions in Great China were overwhelmed by a few super Westerners on a couple of ships??? No planes back then BTW.

We Westerners must have truly been feared by mere mortal men.

View attachment 660548

Nope, wrong guess.

It was not merely about couple of ships, it was about military might.

Although China had the largest economy power in the world, not so with the her military power. It was British that had the strongest military (or at least navy) power; then China was lost in Opium war, subsequently made her become a sickman of Asia (very weak).

The reason why China with the strongest economic power not accompanied with strong military power, while western esp British had stronger ones, was because policy of colonialism that western embrace contrary to the China inward looking policy.

Speaking of GDP...what's up with yours and a 270M+ population...

Indonesia could be the 5th largest economy by 2030 on a nominal basis

https://www.nextbigfuture.com/2012/04/indonesia-could-be-5th-largest-economy.html

So, not far behind US right?

 

[faithfulguy]

You need to learn economy. It has surpassed US several years ago in term of PPP, and is predicted to surpass US in nominal GDP by 2030.

Using PPP to calculate GDP is an Indian style calculation. However, GDP per capita in PPP is a better measurement on the welfare of individual citizens.

so when comparing how much one really makes would affect their life style, GDP/capita in PPP is better measurement than nominal GDP per capita.

But for national economic strength, its only by nominal GDP.

Only Indians shamelessly trying to measure India’s economic strength with accumulative GDP in PPP

 

[antonius123]

Using PPP to calculate GDP is an Indian style calculation. However, GDP per capita in PPP is a better measurement on the welfare of individual citizens.

so when comparing how much one really makes would affect their life style, GDP/capita in PPP is better measurement than nominal GDP per capita.

But for national economic strength, its only by nominal GDP.

Only Indians shamelessly trying to measure India’s economic strength with accumulative GDP in PPP

There is no so called indian style, chinese style, us style, russian style calculation. What happened is they use the unsuitable variable for the measurement.

Nominal GDP is the right measurement for the real economic power.
PPP GDP is the right measurement for the potential economic power.
PPP percapita is the right measurement for the real welfare of the people of a nation.

So which measurement you want to use depend on what you want to measure. You cant mixed them up.

Why PPP GDP is important measurement for the economic power for China case, because China is tightly controlling her Yuan value and quite often devaluate it. Once China revaluate her currency her nominal GDP will increase accordingly.

 

[EpiiC]

If the gap between US economic growth vs China is 3% (assuming China economic growth is 5% vs US 2%), then yes it takes almost 37 years to be in GDP per capita parity.

But when China overtake US in technology, it could come faster, because the growth gap will be bigger. This is not to mention the special and disruptive event such as current covid-19 pandemic, as you can see in the time of war and catastropy the authoritative government like CCP can handle better.

Currently China is not a developed country, so in 37 years to surpass US GDP PER CAPITA would be one heck of an achievement....

 

[Mista]

China is tightly controlling her Yuan value and quite often devaluate it. Once China revaluate her currency her nominal GDP will increase accordingly.

I don't think China today is manipulating their currency like what the US is accusing of. Even the IMF thinks the RMB is fairly valued, but the USD is slightly overvalued.

In July, the IMF said the US dollar was overvalued by 6 percent to 12 percent based on near-term economic fundamentals, while China's yuan was seen as broadly in line with fundamentals.

"Some estimate that a 10 percent appreciation of the dollar, relative to a trade-weighted current basket, reduces US exports by about 1 percent of gross domestic product, or about $200 billion annually," he said.

https://www.chinadaily.com.cn/a/201908/09/WS5d4cb4aaa310cf3e35564b42.html

That's because China's current account surplus, although large, makes up only around 2% of GDP today, quite different from more than a decade ago which made up to 10% of GDP. Their foreign reserves has been stable at around $3 trillion+ and not rapid increasing like in the 2000s.

Their currency's strength is in line with their economic fundamentals.

IMO the real currency manipulators are Singapore and Taiwan lol.

Current account surpluses made up >10% of GDP, and PPP to nominal ratio is very high which is unusual for a developed economy. Taiwan has PPP/nominal ratio similar to Angola and Singapore to Lebanon.

https://qz.com/1257865/singapore-prime-minister-lee-hsien-loong-schooled-trump-on-trade/

https://www.piie.com/blogs/trade-and-investment-policy-watch/currency-manipulation-update-2015-17

PPP/Nominal GDP ratio:
http://statisticstimes.com/economy/gdp-nominal-vs-gdp-ppp.php

 

[Kai Liu]

Using PPP to calculate GDP is an Indian style calculation. However, GDP per capita in PPP is a better measurement on the welfare of individual citizens.

so when comparing how much one really makes would affect their life style, GDP/capita in PPP is better measurement than nominal GDP per capita.

But for national economic strength, its only by nominal GDP.

Only Indians shamelessly trying to measure India’s economic strength with accumulative GDP in PPP

Some countries such as China can use PPP, as a fairer measurement, but certainly not for india as they import everything from overseas using USD...