China’s Economic Dominance Faces Challenges: What Lies Ahead?
It is increasingly seen as an inevitable outcome that China will eventually overtake the United States to become the world’s largest economy. Even as recently as three to four years ago, when the Chinese economy was more stable than it is today, experts projected that this shift would likely occur around 2030. In essence, the narrative of China’s economic supremacy is now a global topic of discussion.
However, lately, this narrative of economic dominance is showing signs of domestic and international instability. The statistics speak for themselves. Firstly, we should consider the analysis recently published by the UK’s Centre for Economics and Business Research (CEBR). According to Beijing sources knowledgeable about global economic information, as of 27 days ago, this research institute had predicted that China would surpass the United States around 2030, even just 1-2 years ago. This would be a truly terrifying prospect for the United States.
However, the CEBR has recently dramatically revised its forecast. It now predicts that it won’t be until 2037, seven years later than initially projected, that China will surpass the United States. This could be disappointing for China. However, considering that they predict that 13 years later, the United States will regain its lead and even be overtaken by India, perhaps this is a small consolation.
The fact that the narrative of China’s economic dominance is wavering can also be seen in the statistic that nearly 964 million Chinese people earn less than 2,000 yuan ($315) a month. According to a recent report by Di Yichaijingrbao, this claim is made by Li Xunlei, Vice Chairman of the China Chief Economist Forum, and is not far-fetched.
This is especially true when you recall that former Prime Minister Li Keqiang delivered a blow to the economic authorities last year by stating that “600 million Chinese people live on an income of just 1,000 yuan a year”. As the youth unemployment rate, which is recording more than 20%, suggests, he also insisted to the young people desperate for jobs that “they should not be pessimistic if they can’t find a job. They should start a business. They should even sell pancakes” if need be.
The Chinese economy has been running breathlessly since the late 1970s when it embarked on major reforms and opened up to the present. It has undoubtedly achieved remarkable results that have amazed the world. Although the forecast has been pushed back to 2037, it still has the prospect of surpassing the United States.
However, it seems undeniable that it is also clearly exposing its limits. Considering the reality that various red flags, including the recent real estate market crisis, are being raised, it seems true. It doesn’t seem like a big surprise that the narrative of China’s economic dominance is taking a hit.
By. Soon Do Hong