5 ms·

It has overtaken by PPP not GDP. By GDP is only a couple years from now.

by mempko 3y ago

wincy 3y ago
If it keeps going up. There’s a good chance it’s going to decline, and by 2030 China (probably sooner) will be in economic freefall. They just don’t have the demographics to sustain economic growth.
- hippoSquid 3y ago
  China has 1.4B people with a GDP per capita 1/6 as high as the US. There isn't any reason to think the average Chinese person will permanently keep producing 1/6th as much value as the average American. Chinese GDP growth is still about double the US at the moment. By the 2030s the US national debt will reach about $50T. Interest payments could be up to $2T per year if rates stay high. That would be unsustainable. The US would have to either cut government expenses or increase inflation to deal with the debt, both of which would hurt GDP. Both countries probably have negative outlooks in the short/medium term but I wouldn't bet against China simply due to their much larger population. Their population could start decreasing and aging but they will continue to have vastly more working age adults than the US for a long time to come.
  - logicchains 3y ago
    >There isn't any reason to think the average Chinese person will permanently keep producing 1/6th as much value as the average American It's entirely possible given how the current Chinese government has forsaken its previous commitment to economic liberalisation and is moving towards more and more state control of the economy. If it moved close enough to the approach of Maoist China (or current North Korea), it could go decades without seeing any meaningful growth in GDP per capita, much as North Korea doesn't see any significant GDP growth.
    - TapWaterBandit 3y ago
      I agree with this. China outstripping the USA honestly seems inevitable to me barring state control of the economy crippling their development. So somewhat ironically, if the USA/West wins their political battle to liberalise China, China would almost certainly become the dominant nation within the "Western/Modern" coalition.
  - catlover76 3y ago
    What really are the consequences to the debt?
    - djbusby 3y ago
      Interest payment becomes too burdensome. Then it's a raise taxes/cut expenses kind of debate.
      - catlover76 3y ago
        Makes sense. What are the consequences of default?
        s1artibartfast 3y ago
        Either having to balance a budget or a downward cycle where more and more interest is required for debt, leaving less and less for function of government.
        catlover76 3y ago
        To be clear: the consequence is that, the next time around, nobody will lend to us if we need it (which is why we would have to start balancing the budget)?
        s1artibartfast 3y ago
        Next time is every single year because the US, like most countries, need to borrow to run the government.
        hippoSquid 3y ago
        Yes we would need to immediately start running a balanced budget. It would probably be a long time before we could borrow again. If we ever did borrow money again, we would be paying a higher interest since we've shown lenders that we can default. It would also mean $33T in assets disappearing from the economy. That's a massive amount that would bankrupt tons of individuals/companies that lent the money. $2.8T of that amount is the social security trust fund which means we need to also instantly cut social security too. $7T of the debt is held by other countries who wouldn't be happy with us either.
  - ZoomerCretin 3y ago
    >The US would have to either cut government expenses or increase inflation to deal with the debt, both of which would hurt GDP. Is the US so broken brained on taxation that we can't even imagine it as an option? You know that's still how we collect revenue, right?
- vkou 3y ago
  Over the past decade, Hacker News has predicted approximately 15 of the past 0 Chinese economic collapses. In any thread about China, you have people shouting about underproduction due to demographics, grousing about their high youth unemployment, and also talking about over-production, and pointing at their ghost cities. Alas, as all three of those very simple narratives are mutually incompatible, we find that year after year, China keeps growing.
  - berserk1010 3y ago
    And yet, European and American funds have been pulling out of China in the last few years. European, American, Japanese, Taiwanese and Korean manufacturing have been leaving China. Evergrande has gone bankrupt. Country Garden is next to go bankrupt. Maybe all these smart money know something you don't.
    - xtian 3y ago
      They know something you don’t also: there’s going to be a war. Not because China is doomed or collapsing but because it’s not.
      - berserk1010 3y ago
        [flagged]
        xtian 3y ago
        Are you ok? Would you like to place a bet on China collapsing within two years? How about $10k?
    - hakfoo 3y ago
      I have to think there's a fair amount of political pressure these days to not be all-in on China. See: any cut-off-your-nose-to-spite-your-face trade rules. This isn't like dealing with the USSR, where the manufacturing infrastructure was admittedly a fair bit further back. We already taught them everything they know! Even if we can say "No new toys from ASML or nVidia", it just means it takes them a few years longer to develop comparable tech... and we don't get a cut of the deal. I feel like the real interesting angle is what happens if the US loses its "aspirational" status, more so than any specific military or economic goal. How long will the world continue to look to Washington for leadership? I think they're already losing a lot of the developing world, with lack of a compelling alternative to Belt And Road and the BRICS-etc. organization.
- jeo123 3y ago
  Evn if they fall to 800mil people, that is still more than 2x more than USA. The level of education in China far exceed USA. Scientific output also exceed USA right now. Then just niched output in AI already surpassed USA just a week ago. You go to any mart in USA, easily 60% stuff come from China. You look in ANY American colleges, you will find "East Asians" a lot even more so in Ivy Leagues. By 2050, we will all acknowledge China is the new USA even if their population drop by half. Look at Japan, their 100m dwindling to 80m still so dominant. You multiply that by 10x and with added ruthlessness in business competition. Hard not to see China gdp NOT exceeding USA in 5-10yrs time. As for economic free fall, USA is due for a super motherload big one. Since it has bigger economy, the fall would be bigger as well. I put my money on China especially now since things it is way cheaper there. Even Tesla look like dwarf when you compare to BYD in China (and they havnt largely tackle market outside China).
  - logicchains 3y ago
    >Evn if they fall to 800mil people, that is still more than 2x more than USA In the time it takes for China's population to fall this low, the US population is expected to grow significantly, assuming the current rate of immigration continues. >Look at Japan, their 100m dwindling to 80m still so dominant Innovation and GDP growth has basically completely stopped in Japan due to the burden of the aging population. What's the last piece of innovative software or hardware you used that was made in Japan?
    - ninkendo 3y ago
      > What's the last piece of innovative software or hardware you used that was made in Japan? Nintendo is the only company left that knows how to actually make good games, so Japan at least has that going for them.
    - onlyrealcuzzo 3y ago
      Population doesn't matter - workforce does. And by this measure, China's advantage vs the US will shrink even more.
  - catlover76 3y ago
- Dalewyn 3y ago
  Not pointing a finger at you specifically, but I've heard some flavor of "China is going to fall over." for at least the last 20 or so years. In that time they have overtaken Japan's former #2 GDP spot, secured the seas in their corner of the world, gotten most of the third world strangled with purse strings, and not give a single damn about economic and diplomatic sanctions. So, excuse me while I file every single one of those "China is going to fall over." claims in my Bullshit folder while I witness the west and particularly the US continue to lose the cold war we westerners/Americans decided to wage.
  - berserk1010 3y ago
    Ironically, I've heard some flavors of "US is going to fall over", for at least the last 40 or so years. If you're not going to pay attention to current events, you should at least see what the smart money is doing. And right now, the smart money is climbing over each other to get out of China.
    - Dalewyn 3y ago
      And China gives precisely zero fucks. The economic sanctions driving some western monies out are only giving China more reason to become self-sufficient, which they are rapidly achieving. Evergrande went bankrupt? So? They're still kicking our ass like it's just Tuesday. The west is in a lose-lose situation. Sanction China and they give no fucks and proceed to give even less fucks, if that's even possible, on the next round of sanctions. Cooperate with (read: sell out even harder to) China and they will eat us raw before selling the excrement back to us. Be so fucking stupid as to wage war and we violate the Age Old Rule(tm) of Never Fight a Land War in Asia; which we will lose by the way, the US hasn't won a single war in modern history despite being the most powerful military force ever known to mankind. The fact we're even here discussing the eventuality of China overtaking America economically speaks for itself. Whether China will overtake and become #1 isn't being questioned, the question is simply when they will overtake. Could be in 5 years, or 10 years, or 20 years, or 50 years, but it's happening.
      - refurb 3y ago
- ZoomerCretin 3y ago
  There's a good chance that the China-pessimists will be proven wrong, just as they have been every time they've predicted their collapse. It's baseless rumors, no different from people predicting that there's always a recession around the corner in the US.
  - seanmcdirmid 3y ago
    The collapse straw man doesn’t equal an economic slow down/middle income trap prediction, but it works well as a straw man. Remember, the prediction was 2026 but that was pushed back to 2035 where china might get parity with the USA in terms of GDP.
huytersd 3y ago
The predictions for the GDP overtake is mid 2040s. That’s more than two decades, not a couple of years. A lot can happen between now and then.
gruez 3y ago
>is only a couple years from now. https://www.economist.com/briefing/2023/05/11/how-soon-and-at-what-height-will-chinas-economy-peak https://www.economist.com/briefing/2023/05/11/how-soon-and-a... >In 2011 Goldman Sachs projected that China’s GDP would surpass America’s in 2026 and become over 50% larger by mid-century. No peak was in sight. At the end of last year the bank revisited its calculations. It now thinks China’s economy will not overtake America’s until 2035 and at its high point will be only 14% bigger (see chart). >China’s peak looks similar in an influential forecast from last year by Roland Rajah and Alyssa Leng of the Lowy Institute, an Australian think-tank. Others see an even lower summit. Capital Economics, a research firm, argues that China’s economy will never be number one. It will reach 90% of America’s size in 2035 and then lose ground. In so far as the Peak China thesis can be captured in a single projection, this is it.
- skjksjgskjb 3y ago
  [flagged]
- csomar 3y ago
  China GDP for 2026 is expected to be $22.2 Trillion. So even if the US achieves 0% growth during all that time (unlikely), then China wouldn't be able to surpass the US, albeit they'll get very close. This chart is quite interesting though: https://www.statista.com/statistics/263770/gross-domestic-product-gdp-of-china/ https://www.statista.com/statistics/263770/gross-domestic-pr... 2023 is a bad year for China. Their GDP (nominal) will decrease because of the exchange rate. I don't know how the predicted return to growth is justified but from my limited experience these predictions are made by people with limited experience.
seanmcdirmid 3y ago
Not even PPP per capita, but overall PPP.

It has overtaken by PPP not GDP. By GDP is only a couple years from now.

by mempko 3y ago

It has overtaken by PPP not GDP. By GDP is only a couple years from now.

If it keeps going up. There’s a good chance it’s going to decline, and by 2030 China (probably sooner) will be in economic freefall. They just don’t have the demographics to sustain economic growth.

hippoSquid 3y ago
China has 1.4B people with a GDP per capita 1/6 as high as the US. There isn't any reason to think the average Chinese person will permanently keep producing 1/6th as much value as the average American. Chinese GDP growth is still about double the US at the moment. By the 2030s the US national debt will reach about $50T. Interest payments could be up to $2T per year if rates stay high. That would be unsustainable. The US would have to either cut government expenses or increase inflation to deal with the debt, both of which would hurt GDP. Both countries probably have negative outlooks in the short/medium term but I wouldn't bet against China simply due to their much larger population. Their population could start decreasing and aging but they will continue to have vastly more working age adults than the US for a long time to come.
- logicchains 3y ago
  >There isn't any reason to think the average Chinese person will permanently keep producing 1/6th as much value as the average American It's entirely possible given how the current Chinese government has forsaken its previous commitment to economic liberalisation and is moving towards more and more state control of the economy. If it moved close enough to the approach of Maoist China (or current North Korea), it could go decades without seeing any meaningful growth in GDP per capita, much as North Korea doesn't see any significant GDP growth.
  - TapWaterBandit 3y ago
    I agree with this. China outstripping the USA honestly seems inevitable to me barring state control of the economy crippling their development. So somewhat ironically, if the USA/West wins their political battle to liberalise China, China would almost certainly become the dominant nation within the "Western/Modern" coalition.
- catlover76 3y ago
  What really are the consequences to the debt?
  - djbusby 3y ago
    Interest payment becomes too burdensome. Then it's a raise taxes/cut expenses kind of debate.
    - catlover76 3y ago
      Makes sense. What are the consequences of default?
      - s1artibartfast 3y ago
        Either having to balance a budget or a downward cycle where more and more interest is required for debt, leaving less and less for function of government.
        catlover76 3y ago
        To be clear: the consequence is that, the next time around, nobody will lend to us if we need it (which is why we would have to start balancing the budget)?
        s1artibartfast 3y ago
        Next time is every single year because the US, like most countries, need to borrow to run the government.
        hippoSquid 3y ago
        Yes we would need to immediately start running a balanced budget. It would probably be a long time before we could borrow again. If we ever did borrow money again, we would be paying a higher interest since we've shown lenders that we can default. It would also mean $33T in assets disappearing from the economy. That's a massive amount that would bankrupt tons of individuals/companies that lent the money. $2.8T of that amount is the social security trust fund which means we need to also instantly cut social security too. $7T of the debt is held by other countries who wouldn't be happy with us either.
- ZoomerCretin 3y ago
  >The US would have to either cut government expenses or increase inflation to deal with the debt, both of which would hurt GDP. Is the US so broken brained on taxation that we can't even imagine it as an option? You know that's still how we collect revenue, right?
vkou 3y ago
Over the past decade, Hacker News has predicted approximately 15 of the past 0 Chinese economic collapses. In any thread about China, you have people shouting about underproduction due to demographics, grousing about their high youth unemployment, and also talking about over-production, and pointing at their ghost cities. Alas, as all three of those very simple narratives are mutually incompatible, we find that year after year, China keeps growing.
- berserk1010 3y ago
  And yet, European and American funds have been pulling out of China in the last few years. European, American, Japanese, Taiwanese and Korean manufacturing have been leaving China. Evergrande has gone bankrupt. Country Garden is next to go bankrupt. Maybe all these smart money know something you don't.
  - xtian 3y ago
    They know something you don’t also: there’s going to be a war. Not because China is doomed or collapsing but because it’s not.
    - berserk1010 3y ago
      [flagged]
      - xtian 3y ago
        Are you ok? Would you like to place a bet on China collapsing within two years? How about $10k?
  - hakfoo 3y ago
    I have to think there's a fair amount of political pressure these days to not be all-in on China. See: any cut-off-your-nose-to-spite-your-face trade rules. This isn't like dealing with the USSR, where the manufacturing infrastructure was admittedly a fair bit further back. We already taught them everything they know! Even if we can say "No new toys from ASML or nVidia", it just means it takes them a few years longer to develop comparable tech... and we don't get a cut of the deal. I feel like the real interesting angle is what happens if the US loses its "aspirational" status, more so than any specific military or economic goal. How long will the world continue to look to Washington for leadership? I think they're already losing a lot of the developing world, with lack of a compelling alternative to Belt And Road and the BRICS-etc. organization.
jeo123 3y ago
Evn if they fall to 800mil people, that is still more than 2x more than USA. The level of education in China far exceed USA. Scientific output also exceed USA right now. Then just niched output in AI already surpassed USA just a week ago. You go to any mart in USA, easily 60% stuff come from China. You look in ANY American colleges, you will find "East Asians" a lot even more so in Ivy Leagues. By 2050, we will all acknowledge China is the new USA even if their population drop by half. Look at Japan, their 100m dwindling to 80m still so dominant. You multiply that by 10x and with added ruthlessness in business competition. Hard not to see China gdp NOT exceeding USA in 5-10yrs time. As for economic free fall, USA is due for a super motherload big one. Since it has bigger economy, the fall would be bigger as well. I put my money on China especially now since things it is way cheaper there. Even Tesla look like dwarf when you compare to BYD in China (and they havnt largely tackle market outside China).
- logicchains 3y ago
  >Evn if they fall to 800mil people, that is still more than 2x more than USA In the time it takes for China's population to fall this low, the US population is expected to grow significantly, assuming the current rate of immigration continues. >Look at Japan, their 100m dwindling to 80m still so dominant Innovation and GDP growth has basically completely stopped in Japan due to the burden of the aging population. What's the last piece of innovative software or hardware you used that was made in Japan?
  - ninkendo 3y ago
    > What's the last piece of innovative software or hardware you used that was made in Japan? Nintendo is the only company left that knows how to actually make good games, so Japan at least has that going for them.
  - onlyrealcuzzo 3y ago
    Population doesn't matter - workforce does. And by this measure, China's advantage vs the US will shrink even more.
- catlover76 3y ago
Dalewyn 3y ago
Not pointing a finger at you specifically, but I've heard some flavor of "China is going to fall over." for at least the last 20 or so years. In that time they have overtaken Japan's former #2 GDP spot, secured the seas in their corner of the world, gotten most of the third world strangled with purse strings, and not give a single damn about economic and diplomatic sanctions. So, excuse me while I file every single one of those "China is going to fall over." claims in my Bullshit folder while I witness the west and particularly the US continue to lose the cold war we westerners/Americans decided to wage.
- berserk1010 3y ago
  Ironically, I've heard some flavors of "US is going to fall over", for at least the last 40 or so years. If you're not going to pay attention to current events, you should at least see what the smart money is doing. And right now, the smart money is climbing over each other to get out of China.
  - Dalewyn 3y ago
    And China gives precisely zero fucks. The economic sanctions driving some western monies out are only giving China more reason to become self-sufficient, which they are rapidly achieving. Evergrande went bankrupt? So? They're still kicking our ass like it's just Tuesday. The west is in a lose-lose situation. Sanction China and they give no fucks and proceed to give even less fucks, if that's even possible, on the next round of sanctions. Cooperate with (read: sell out even harder to) China and they will eat us raw before selling the excrement back to us. Be so fucking stupid as to wage war and we violate the Age Old Rule(tm) of Never Fight a Land War in Asia; which we will lose by the way, the US hasn't won a single war in modern history despite being the most powerful military force ever known to mankind. The fact we're even here discussing the eventuality of China overtaking America economically speaks for itself. Whether China will overtake and become #1 isn't being questioned, the question is simply when they will overtake. Could be in 5 years, or 10 years, or 20 years, or 50 years, but it's happening.
    - refurb 3y ago
ZoomerCretin 3y ago
There's a good chance that the China-pessimists will be proven wrong, just as they have been every time they've predicted their collapse. It's baseless rumors, no different from people predicting that there's always a recession around the corner in the US.
- seanmcdirmid 3y ago
  The collapse straw man doesn’t equal an economic slow down/middle income trap prediction, but it works well as a straw man. Remember, the prediction was 2026 but that was pushed back to 2035 where china might get parity with the USA in terms of GDP.

huytersd 3y ago

The predictions for the GDP overtake is mid 2040s. That’s more than two decades, not a couple of years. A lot can happen between now and then.

gruez 3y ago

>is only a couple years from now. https://www.economist.com/briefing/2023/05/11/how-soon-and-at-what-height-will-chinas-economy-peak https://www.economist.com/briefing/2023/05/11/how-soon-and-a... >In 2011 Goldman Sachs projected that China’s GDP would surpass America’s in 2026 and become over 50% larger by mid-century. No peak was in sight. At the end of last year the bank revisited its calculations. It now thinks China’s economy will not overtake America’s until 2035 and at its high point will be only 14% bigger (see chart). >China’s peak looks similar in an influential forecast from last year by Roland Rajah and Alyssa Leng of the Lowy Institute, an Australian think-tank. Others see an even lower summit. Capital Economics, a research firm, argues that China’s economy will never be number one. It will reach 90% of America’s size in 2035 and then lose ground. In so far as the Peak China thesis can be captured in a single projection, this is it.

skjksjgskjb 3y ago
[flagged]
csomar 3y ago
China GDP for 2026 is expected to be $22.2 Trillion. So even if the US achieves 0% growth during all that time (unlikely), then China wouldn't be able to surpass the US, albeit they'll get very close. This chart is quite interesting though: https://www.statista.com/statistics/263770/gross-domestic-product-gdp-of-china/ https://www.statista.com/statistics/263770/gross-domestic-pr... 2023 is a bad year for China. Their GDP (nominal) will decrease because of the exchange rate. I don't know how the predicted return to growth is justified but from my limited experience these predictions are made by people with limited experience.

seanmcdirmid 3y ago

Not even PPP per capita, but overall PPP.