According to The Wall Street Journal on September 2, many experts are reconsidering when or if China will ever overtake the U.S. position as the world’s largest economy amid the current economy already battered by a stringent zero-COVID policy and real estate crackdown.

The report noted that while previous forecasts for China this year were adjusted, economists have grown more worried about its economic outlook. They believe the country’s looming demographic crisis and rising debts would likely take a toll on any rebound.

The Lowy Institute, an Australian research firm, reported in March that China’s annual growth would average only 2% to 3% from 2021 to midcentury, citing gloomy demographics, and lower returns from infrastructure investment, among other factors. 

The think tank noted that even at this rate, China could still surpass the U.S. However, “it would never establish a meaningful lead over the United States and would remain far less prosperous and productive per person than America, even by mid-century.”

The institute also added that China’s further economic downturn since March has “at minimum pushed back the likely moment when China might overtake the U.S., and made it more likely that China might in fact never be able to do so.”

Former U.S. Treasury Secretary Lawrence Summers has dramatically lowered his growth forecast for China over the risks of an aging population and the increasing interference in business affairs from the communist regime.

Mr. Summers, now a professor at Harvard University, thinks that the expectations of China’s overtaking the U.S. would be akin to that of Japan and Russia in the past, which seem ridiculous nowadays.

He said, “I think there is a real possibility that something similar would happen with respect to China.”

As The Wall Street Journal reported, researchers believe that the U.S. economy will still have a huge impact, and the dollar will still maintain the major reserve currency worldwide for a long time.

Some even question whether there would be any significant change if China manages to surpass the U.S.

Leland Miller, chief executive officer at China Beige Book research firm, commented that China’s GDP cannot reflect growth quality. 

But if the Chinese regime could claim the top GDP ranking, then its propaganda system would take that chance to prove how superior China’s state-led model is to the world and its people. It would even say that the U.S. is falling both politically and economically. 

Miller also claimed that the U.S. current living standards, calculated by per capita GDP, are five times better than in China, and the gap would unlikely close anytime soon.

In addition, Mark Williams, Capital Economics’s chief Asia economist, said, “A lot of people for a long time have overestimated the competence of China’s leadership and have been shocked by the missteps with Covid and the property sector. The weakness these crises have revealed have been present and growing for a long time.”

Williams’ remarks came after his firm’s researchers forecasted that China’s economy would grow to around 87% of the U.S. size in 2030, before falling back to 81% in midcentury. The institute cited contracting working population, low productivity and other challenges.

Bert Hofman, director of the East Asian Institute at the National University of Singapore and a former economist at the World Bank, noted that China will not be able to overtake the U.S. if it continues to stick with the so-called limited reforms. Moreover, further separation from the U.S. would prove that much more difficult for it to progress.

Recently, top Chinese leaders signaled that they would likely miss the government’s annual growth target of around 5.5% this year.

Overseas brokerage firms also had to adjust their previous growth forecasts for the CCP this year.

Last month, Goldman Sachs lowered its already below-consensus prediction from 3.3% to 3.0%, while Nomura cut its previous forecast from 3.3% to 2.8%.In late July, the IMF downgraded its forecast from 4.4% in April to 3.3%, citing COVID strict lockdowns and the real estate crisis in the country.

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