"China's GDP to Surpass US by 2028"… Japanese Think Tank Advances Forecast by 8 Years

Report from Japan Economic Research Center... "Surpassing Possible by 2029 Even Without COVID Worsening"
Last Year Predicted "No Surpassing Until 2035"
US Unemployment Claims 853,000... Highest in 3 Months
China Criticism Intensifies... FCC "Huawei National Security Threat"

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] A leading Japanese think tank has forecast that China's nominal gross domestic product (GDP) will surpass that of the United States by 2028. Last year's survey predicted that China would not overtake the U.S. until 2035, but the COVID-19 pandemic is expected to further slow the growth rate of the U.S. economy. Accordingly, there is growing anticipation that the U.S. will continue its tough stance against China to prevent this overtaking.

According to the Nihon Keizai Shimbun on the 11th, the Japan Center for Economic Research (JCER), a Japanese think tank, recently projected in its mid-term forecast report on the economies of 15 Asian countries that "China's nominal GDP will surpass that of the U.S. by 2028." It added, "Due to the impact of the COVID-19 pandemic, the recovery speed of the U.S. economy has slowed, bringing forward the overtaking point to 2028."

This prediction by JCER advances the overtaking timeline by eight years compared to last year's forecast that "China will never surpass the U.S. GDP until 2035." JCER differentiated scenarios based on the extent of the COVID-19 impact, and even under the standard scenario where "COVID-19 affects the economy for about 4 to 5 years," the overtaking point was expected in 2029. This suggests a high possibility that China will surpass the U.S. in GDP within the next decade.

JCER cited the sharp decline in U.S. employment and research and development (R&D) expenditures due to the COVID-19 pandemic as major factors behind the GDP reversal between the two countries. Conversely, China, which showed a rapid recovery from the pandemic, is analyzed to have gained the potential to catch up with the U.S. faster than previously expected. Earlier in September, a research institute under the Chinese State Council also announced that China's GDP would surpass the U.S. by 2032.

As JCER pointed out, the COVID-19 situation in the U.S. continues to worsen. According to foreign media including CNN, as of the 10th (local time), the cumulative confirmed COVID-19 cases in the U.S. reached 15,582,840, and cumulative deaths approached 300,000 at 292,091, according to statistics from Johns Hopkins University. On that day, the daily death toll in the U.S. hit a record high of 3,265. With various lockdown measures such as business hour restrictions being implemented across U.S. regions, concerns about economic contraction are growing.

The weekly unemployment claims announced by the U.S. Department of Labor on the same day also rose by 137,000 from the previous week to 853,000, marking the highest figure in three months since mid-September. Before the COVID-19 pandemic, weekly unemployment claims in the U.S. averaged around 200,000. However, during the peak of the first wave of COVID-19 in the last week of March, claims surged to 6,687,000.

The U.S. government's efforts to check China are also expected to intensify. Despite being at the end of his term, the Donald Trump administration continues its daily offensive against China. According to Bloomberg News, on the same day, the U.S. Federal Communications Commission (FCC) unanimously concluded that Huawei, China's largest telecommunications equipment company, poses a threat to U.S. national security. The FCC rejected Huawei's petition requesting a reconsideration of the previous FCC decision that Huawei threatens U.S. national security. Additionally, measures were prepared to remove equipment from Huawei and another Chinese company, ZTE, from U.S. communication networks and to halt China Telecom's operations within the U.S. President-elect Joe Biden indicated his intention to continue a tough policy toward China by nominating Katherine Tai, a Chinese-American and senior counsel to the House Ways and Means Committee Democrats, as the next trade policy chief the day before.

This content was produced with the assistance of AI translation services.