Thought for the day

China's GDP is Likely to Grow to
Twice the Size of US GDP

13 July 2024
South Korea, and Taiwan have achieved GDP per head of around 80% of the US level, starting from very close to poverty. If China can raise GDP per head to just 50%+ of US levels (hardly an impossible task given its record over the last 40 years), it will have a GDP twice that of the US. If China's GDP per capita gets anywhere near those achieved in South Korea, its economy will approach three times the size of the US.

China and South Korean GDP per Capita: 2008-2023
GDP per Capita in Purchasing Power Parity Terms, Int$

Any number of factors might derail China's growth, even in the short term, including war over Taiwan, mismanagement of the Chinese economy linked to its poor Governance rating, and further attempts by America to reduce trading links with China. But seismic events aside, given the giant size of its home market, its role as workshop to the world and its extraordinary growth rate since 1980, it appears quite likely that China will come to dominate the world economy over the next quarter century.
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