"China Cannot Catch Up with the US Economy"... Even If It Does, It Will Fall Behind Again

1% Economic Growth Rate Forecast for 2050
May Surpass the US in the Mid-2040s
Could Be Narrowly Overtaken Again

Amid recent financial market instability and a real estate crisis shaking the Chinese economy, there is a forecast that China’s economic catch-up with the United States will be practically difficult.

On the 5th (local time), Bloomberg Economics predicted that China will surpass the United States in gross domestic product (GDP) only by the mid-2040s.

Before the COVID-19 pandemic began, Bloomberg had predicted that China would overtake the U.S. as early as the early 2030s, but this timeline has been delayed by about a decade. Furthermore, even when the overtaking point arrives, China is expected to surpass the U.S. by a narrow margin and soon after fall behind again in GDP.

China’s economic growth rate outlook varies depending on the extent of the ripple effects from the real estate crisis. Bloomberg forecasted that if the economic crisis ends with a contraction in the real estate and financial markets, the growth rate will decline to 3.5% in 2030 and 1% in 2050. These figures are lower than the previous forecasts of 4.3% and around 1.6%. The Chinese government aims for growth around 5% this year.

However, if the real estate crisis does not subside and the financial market suffers a shock comparable to the Lehman Brothers collapse, Bloomberg observed that the average economic growth rate could fall to 1.7% by 2032.

As China’s economic outlook is predicted to be bleak, Bloomberg explained that many countries around the world are reconsidering how to continue cooperation with China. Recently, the United States and the Group of Seven (G7) are expanding the influence of Western countries in the international community while assessing the ripple effects of China’s economic slowdown.

On the other hand, there is a positive outlook that the U.S. can achieve a soft landing?controlling inflation without falling into a recession. Goldman Sachs lowered the probability of a U.S. economic recession from 20% to 15%.

The potential growth rate, which gauges the fundamental strength of the U.S. economy, is also expected to show a favorable trend. Bloomberg Economics predicted the U.S. potential growth rate to be 1.7% from last year through this year and expects it to record 1.5% in 2050, indicating only a slight decline.

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