China’s corona narrows the gap between the US and GDP… ‘Overtaking 2028’ Observation Map (Comprehensive)

The coronavirus infection (Corona 19) situation is expected to have a major impact on the competition for gross domestic product (GDP) between the US and China, the world’s first and second largest economies.

This is because the US economy, which was engulfed by the shock of Corona 19, has reversed growth, but only the Chinese economy has grown positively, and it is possible to close the gap with the US faster than previously expected.

◇ China’s GDP surpasses the US 70% for the first time

According to China’s National Bureau of Statistics on the 18th, in 2020, China’s GDP was 10.06 trillion yuan (about 7,290 trillion won), up 2.3% from the previous year.

The economic growth rate of 2.3% is the lowest in 40 years since it recorded negative in 1976 after the Cultural Revolution ended. It can be said that China also suffered a severe economic shock from the Corona 19 incident.

However, as the world was hit by the worst economic shock since the Great Depression last year, it is drawing particular attention that China is the only country that has achieved economic growth among major countries except Taiwan, which is not a member of the United Nations.

China’s economic performance last year was not only a result of the impact of Corona 19, but also amid the worsening of the US-China New Cold War.

Reuters reported, “Many people were surprised by the speed at which the world’s second largest economy (China) recovers from the coronavirus shock.” He pointed out.

On the other hand, the United States, which is the country with the most severe corona 19 deaths, has not yet released an economic report last year, but several organizations predict that reverse growth will be certain.

The International Monetary Fund (IMF) predicted that the US economic growth rate will record -4.3% in 2020 in its World Economic Outlook report published in October last year.

In the end, it can be seen that the gap between the first and second place has narrowed a lot as China has moved a little bit further than before while the US stepped back in the long-distance race of total GDP competition.

Bloomberg News said, “The upward trend of the Chinese economy is accelerating,” and said, “With the success of controlling Corona 19, China’s share of global trade and investment has also increased.”

In 2008, during the global financial crisis, China’s GDP was only 31% of the United States.

However, based on the IMF’s recent projections, China’s GDP is expected to exceed the US’s 71% in 2020, exceeding the 70% level for the first time. This is an increase of 4.2 percentage points from 2019.

The timing of China’s prediction of overtaking US GDP, as observed by experts, is also gradually moving forward from the previous 2030.

Homi Karas, a researcher at the Brookings Institute in the United States, predicts that China’s GDP will surpass the U.S. GDP by 2028 if it is the current trend. This is two years earlier than our own predictions in the past.

Japan’s Nomura Securities also predicts that 2028 will be the year when US-China GDP reversal will take place.

According to these observations, about 7 years from now, China will surpass the United States to become the world’s No. 1 economy in terms of total GDP.

As China surpassed Japan and ranked second in the world in terms of total GDP in 2010, the reversal of the US-China GDP ranking could be recorded as a historical event that symbolizes changes in the world’s order in the future. .

The trend of accelerating China’s pursuit of the US is expected to continue this year.

China’s quarterly economic growth rate steadily rose to 3.2% in the second quarter, 4.9% in the third quarter, and 6.5% in the fourth quarter after falling to -6.8%, the worst ever recorded in the first quarter of last year due to the impact of Corona 19 And there is.

In a recent poll by Reuters, experts predicted that China’s economic growth rate would rise significantly to 8.4 percent this year.

Bloomberg news agency said, “The situation is not changing at once that other economies start to recover with the spread of vaccines. Economic experts expect China to continue to outpace its global competitors.”

◇ Increasing China’s status, causing concerns in each country in the New Cold War

China, where the Corona 19 pandemic began first, normalized the economy relatively earlier than other countries, leading to a higher proportion of China in various fields such as trade and investment.

At a press conference on the day, Ning Ji-zer, head of the National Statistics Bureau, estimated that China’s GDP will account for about 17% of the world’s total GDP by 2020. According to Xinhua News Agency, the share of China’s GDP in 1978, the year the reform and opening up began, was only 1.7%.

The United Nations Conference on Trade, Investment and Development (UNCTAD) estimated that last year’s global trade would decline by 5.6%, but China’s total import and export in 2020 rose 1.5% from the previous year, despite the global economic contraction due to Corona 19.

Conversely, China sold medical devices and electronic devices to all over the world and enjoyed the’Corona Special’, achieving a record trade surplus of 535 billion. From January to October last year, China’s exports and imports accounted for 12.8% of the world’s total imports and exports, the largest ever.

Despite the uncertainty of the US-China New Cold War, global investors seeking profits increased their share of stocks and bonds in China, whose economy quickly normalized last year. According to Bloomberg News, foreign investors last year bought only Chinese bonds worth 1.1 trillion yuan.

Although the United States has clearly demonstrated its strategic intention to isolate China, China signed an RCEP (Regional Comprehensive Economic Partnership Agreement), which included a number of US allies such as Korea, Japan and Australia, and an investment agreement between China and the European Union (EU). He went on to find breakthroughs in diplomacy while making successes.

As the situation became like this, the perception of the Chinese leadership, which was in a serious crisis, faced with internal and external accusations that it had curtailed and concealed the corona 19 truth until the containment of Wuhan a year ago, is now remarkably optimistic.

On the 11th, President Xi Jinping said, “The world is in a period of great change that has not been around for 100 years, but the time and situation are on our side.”

The Communist Party of China originally proposed the goal of building an “entire Xiaokang society” by 2020, and specifically pledged to double the GDP of 2020 in 2010.

Although the quantitative goal of doubling GDP in 10 years was not achieved in the aftermath of last year’s Corona 19 shock, China is promoting’socialist system supremacy’ internally, emphasizing that China has achieved rare economic growth worldwide.

Moreover, since this year is the 100th anniversary of the founding of the Communist Party, which the Chinese authorities are planning to launch on a large scale, such propaganda activities are expected to be further strengthened in the future.

The Hong Kong South China Morning Post (SCMP), owned by China’s Alibaba Group, said, “The first Chinese economy surpassing 100 trillion yuan will be recorded as another symbolic victory for the CCP.”

It is also pointed out that during the days of the Biden administration, strategic competition between the United States and China is expected to continue, and as China’s share of the global economy has increased, it has become a difficult task for countries around the world to establish relations with China.

Despite the disrespectful gaze of the US government, last month the European Union (EU) received gifts such as investment preferences from China and signed an investment agreement to strengthen bilateral economic cooperation. It is evaluated as an example showing that it is being exercised.

Bloomberg news agency pointed out, “As China’s position in the post-Covid-19 pandemic era has strengthened, debate over what kind of relationship it will establish with China among other countries in the world has become urgent.”

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