Is China in serious financial trouble?
China is in the midst of a profound economic crisis. Growth rates are flagging as an unsustainable mountain of debt piles up; China's
China's overall debts have widened to the equivalent of more than 300% of gross domestic product, far in excess of the 253% of GDP the U.S. owes. A chunk of China's debt is owed by its local governments.
Is China the largest economy? China has grown to have the second largest economy in the world, second only to that of the United States. Some forecasters predict that in the coming decades, China will grow to have the largest economy based on its Gross Domestic Product (GDP).
The counterintelligence and economic espionage efforts emanating from the government of China and the Chinese Communist Party are a grave threat to the economic well-being and democratic values of the United States. Confronting this threat is the FBI's top counterintelligence priority.
Economists are less and less certain that the Chinese economy can overtake the US, despite the promises of the Chinese Communist Party. The tipping point in history is set, the curves are due to cross, and China will outpace the US to become the world's leading economic power once again.
In a report released on Friday, the global financial policy body – also known as the IMF – projected China's economic growth would drop to 4.6% this year, down from its 5.2% growth in 2023, and fall further to 3.4% by 2028.
While the International Monetary Fund (IMF) expects the Chinese economy to finish the year at 5.4 percent growth, economists predict a slowdown in 2024 and beyond amid structural problems such as record levels of debt and a low birth rate. Foreign investors have voted with their pocketbooks.
US gross domestic product rose 6.3% in nominal terms, compared to China's 4.6% gain in 2023.
[2] A report by the credit rating agency S&P Global in 2022 estimated that 79 per cent of corporate debt in China was owed by SOEs (the IMF does not break down the proportion of debt owed by SOEs).
The US has pulled further ahead of China in the race for world's biggest economy, thanks in part to a vibrant American consumer. US gross domestic product rose 6.3% in nominal terms — that is, unadjusted for inflation — last year, outpacing China's 4.6% gain.
What is the problem between us and China?
In recent years, tensions between the United States and China have introduced new challenges—especially related to economic and defense issues. China is a major trading partner for the United States but it is also developing its military capabilities, which poses challenges to the U.S. military.
China's Share in U.S. – World Trade
China has the third largest share in U.S.–World Trade following Mexico and Canada. In 2021, 8.6% of total U.S. exports of $1.8 trillion to the World were exported to China and 17.9% of total U.S. Imports of $2.8 trillion were imported from China.
The CEBR forecast suggests China could potentially take the top spot as the world's largest economy by gross domestic product as early as 2037. The forecast also sees potentially strong growth in other countries such as India.
China's nominal GDP is the second-largest after the United States, but measured at PPP, China's GDP is larger than that of the United States by a considerable margin.
Consistent with these observations, we show that the timing of China's overtaking will be determined by the pace of US and Chinese nominal GDP growth and moves in the bilateral exchange rate. For a range of plausible assumptions, we find that overtaking occurs during the 2030s, most likely in the middle of the decade.
The United States is the undisputed heavyweight when it comes to the economies of the world. America's gross domestic product in 2022 was more than 40% greater than that of China, the world No. 2. Even more striking, U.S. GDP was over five times that of the next two largest economies, Japan and Germany.
China's debt-to-GDP ratio climbs to record 287.8% in 2023 - Nikkei Asia.
Previous estimates have ranged from 65 million to 80 million vacant housing units in China. He's remarks suggest even these numbers are an underestimate. Xi Jinping's regime looks paralysed in the face of this crisis.
“China's economy is in a property-led and fertility-led depression,” Yardeni wrote. “That's bad news for China's people and for the Chinese Communist Party (CCP) but benefits countries that import Chinese goods at depressed prices.”
Japan has avoided falling into a technical recession after its official economic growth figures were revised. The revised data shows gross domestic product (GDP) was 0.4% higher in the last three months of 2023 compared to a year earlier.
Will China recover in 2024?
The International Monetary Fund projects China's 2024 growth at 4.6%, declining towards 3.5% in 2028. Chinese stocks (. CSI300) , opens new tab and the yuan were largely unchanged.
China's crushing debt levels, ageing population and an ongoing property crisis means it may never surpass the US to become the world's largest economy, according to a leading investment bank.
The economic strength of a country is determined by its gross domestic product (GDP). In other words, the amount of all income generated in the country from the sale of goods and services. With a GDP of 25.44 trillion dollars, the USA is by far the world's largest economy in this ranking for 2022.
In 2022, the IMF judged the Chinese economy in PPP terms to be 23% larger than America. At the same time, using PPP data the World Bank estimated the Chinese economy to be 18.8% larger than America. And even the CIA considered the differential in favour of China at 16%.
The United States pays interest on approximately $850 billion in debt held by the People's Republic of China. China, however, is currently in default on its sovereign debt held by American bondholders.
