US vs China: China’s Overtake of the American Economy
![](https://admediaryllc.wpengine.com/wp-content/uploads/2019/01/CrWQMsJX4hIupWGfiCmhF2nJCZO1uvd3.jpg)
China is in the driving seat according to a report published recently, which stated that China would be overtaking the United States to be the top economy by 2032. As many had suspected in the past, the emerging economies of China, India and Brazil will overtake the developed countries, but this might happen later than expected.
The Centre for Economics and Business Research (CEBR) reported that India was set to overtake its past colony leader by 2018, but due to the setbacks faced this year, it’s going to extend the trip by a year or two. Hence, India is set to overtake Britain’s economy by 2020.
The same is the case with Brazil. It was set to overtake Italy’s economy by 2018, but it is projected to be delayed by two years.
Chinese Economy vs the American Economy
Forecasted by a recent study conducted by the economists at HSBC Holdings PLC, which took into account 75 nations, China will remain the single largest contributor to the global economic growth with a world trade of $4,233 billion, which is 0.9 times more than the United States’.
China exports $2,401 billion worth of goods currently compared to the United States’ $1,501 billion. On the other hand, the United States leads with imports with a total value of $2,343 billion to China’s $1,832 billion. China’s keenness toward exports has put it in a large trade surplus with the United States. Although China will buy a total of $60-$90 billion worth of American agriculture goods, these goods are set to help China’s economy for future growth.
Furthermore, China has almost the same number of city dwellers as the US did in the 1940s. Farming in China is also changing, and the country is becoming more and more urbanized. This will increase the demand for jobs, apartments and other services, resulting in an increase in the purchasing power of about 200-400 million people.
How Will This War Shape the Global Economy?
The IMF released a new report stating that the expected growth of the world economy is going to be 3.7 percent, which is lower than what they estimated in April. It is the same amount of growth seen in 2017, which signals a slowdown in growth.
This could be because President Trump recently imposed huge tariffs of about $200 billion on imports from China in an attempt to punish the country for years of unfair trade practices and stealing from Americans. Although this worked and the Chinese economic growth will drop by 0.4 percent, China imposed its own tariffs on American imports, making it harder for American businesses to sell in Chinese markets.
The lead economist of the IMF, Maurice Obstfeld, added, “When you have the world’s two largest economies at odds, that’s a situation where everyone suffers.” He further added that if the war continues, the world economy could fall by another percentage.