When will China’s economy overtake America’s? | The Economist

Added: 2026-05-10

[00:00:00]Let's try and put it all together then and talk  about this uh extraordinarily important question that people have debated for a long time of  when China might become the biggest economy in the world measured just in in in pure dollars  at market exchange rates. Simon, we had a cover on this a few years ago about peak China uh and  there was an extraordinary chart in this showing the various projections that have been made and  how the debate has shifted. Do you want to talk us through that? Sure. Yeah. So on the horizontal  axis you have years beginning at the start of this century and stretching right out to 2070. And  then importantly on the vertical axis what you're seeing are percentages. That's China's GDP as a  percent of US GDP. So it's a comparison of China's GDP relative to America's. So when it gets to 100,  it's level with America. So these are forecasts of where China will be relative to America made at  different times in the past. Not only has the date at which China might overtake shifted but also the  trajectory if you like of China after that point.

[00:01:06]So we used to assume that China would overtake  at some point and then the lead would continue growing. That view has changed and you know a few  years ago Goldman Sachs updated their projections and had China overtaking a bit later and then  plateauing. So the two were running roughly neck andneck uh for quite a few years out to 2070. Even  more recently, the OECD now thinks that perhaps it'll never overtake at all. And you see this  peak where it gets right level with America and then starts actually losing ground. And I think  that's gives sort of economic meaning to this catchy phrase peak China. It's not that China's  GDP will shrink. It's that China's GDP relative to America will get close and then fall slowly  away. Partly because of the demographic issues we've just been discussing. So, we asked people  in the newsletter whether they thought China would ever become the world's biggest economy. And here  is the verdict. We can see that a big majority uh 74% of viewers think that China will eventually  overtake the US with a plurality saying it will happen in the 2030s. Only 26% of people agree  with that OECD line from Simon's chart showing that China might never catch up with the US. Mike,  let's start with you. Do you think China will ever overtake the US for economic size? I think as it  stands, I'm I'm with the 26% here. I'm I'm in the never camp. Um I I think that's not because I  think the Chinese economy does have some sort of life left in it yet. I think it's still very  low income relative to where it could be. Um I I think the demographic issue is really really going  to bite. Um one thing I would say here is I'm I'm partly less interested in the Chinese side where  I think the misallocation and and the demographics are a big problem. This seems to me more like it's  the US is to lose. um if the US loses its dynamism through uh various political constraints, if  it turns uh to become very anti-immigration, its population growth slows considerably, um I can  see the US losing its own lead more than I can see uh China sort of accelerating to supersede the  US if the US doesn't get things wrong in that way. I'm in the never camp as well. I think uh  I think that's partly it's it's a policy choice really for the government and we've seen in recent  years they have deemphasized GDP growth targets.

[00:03:32]They're trying to emphasize what they call  highquality growth which is ultimately growth which is you not intended to generate uh optimal  economic activity but to do other things to make the country powerful, strong etc. Uh and so for as  long as that kind of policy holds I think it has some you know some runway yet uh that's unlikely  to to overtake America. So, I still think that China will overtake America, but America might  subsequently reovert China. Uh, that's not a view that's original to me. I think it was first  set out by Capital Economics, a research firm, and they said this is the ideal outcome because  everyone gets to be right. Excellent. Well, uh, I don't think I can beat that for fun. I think I'm  probably in the never camp. Although, it seems to me that so much here depends on the AI race that  uh you know, it's entirely possible to imagine uh China overtaking the US if somehow it managed  to get ahead uh in AI. So, that's where I stand.

[00:04:34]But I I I like that even once it's overtaken,  that's not the that's not the end of the matter.