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United States China PROJECTIONS +11% +10% Current growth Long-term growth Fast growth Long-term growth Current growth Fast growth +7% +4% +3% +2.5% ’80 ’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20 ’25 ’30 ’35 ’40 ’44 0 5 10 15 20 25 30 35 40 45 50 $55 If China grows a little faster and the U.S. slows to its long-term trend, the U.S. would be number two by 2022. FASTER CHINA If the U.S. conforms to its long-term trend of 2.5 percent, and China slows to what some estimate is its likely long-term growth rate of around 7 percent, the year would be 2032. LONG-TERM TREND Assuming growth remains where it was in 2010 in each country, the lines would cross in 2024. MORE OF THE SAME GDP in trillions, not adjusted for inflation SOURCE: International Monetary Fund ALICIA PARLAPIANO AND HOWARD SCHNEIDER /THE WASHINGTON POST United States China +2.9 -2.6 +9.8 +7.2% +14.2 +3.8% Annual GDP growth ’80 ’85 ’90 ’95 ’00 ’05 ’10 China’s way to the top China’s economy is the world’s second biggest, with a $5.8 trillion gross domestic product that eclipsed Japan in 2010. Will China pass the United States? When? There was a similar debate about Japan in the 1980s before growth stalled after a collapse in that country’s financial and real estate markets. Japanese growth has remained low ever since, an era known as the “lost decades.” Some analysts regard China as a bubble waiting to burst, and foresee a perhaps dramatic slowdown for the country — or at least to much less than the 10 percent growth it registered last year. But there are major differences between Japan and China — perhaps most significantly their populations. With its wealth spread among roughly 1.4 billion people, per capita income in China remains low at around $4,200 — representing an immense potential for the country to extend development to its poorer regions. Does that mean sustained, 10 to 11 percent growth is possible, or will China’s expansion slow to a more reasonable rate, say, 7 percent or less? As for the United States, its long-term trend GDP growth is around 2.5 percent. Will that be sustained going forward? Simply by extending last year’s growth rates for the two countries, China’s economy becomes the biggest in 2024. GDP in trillions, not adjusted for inflation U.S. $14.6 $47,132 $42,325 $4,200 $5.88 $5.47 Japan China ’80 ’10 ’00 ’90 GDP per capita, not adjusted for inflation U.S. Japan China ’80 ’10 ’00 ’90
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China's economy

Nov 01, 2014

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If you don't know already. China’s economy is the world’s second biggest, with a $5.8 trillion gross domestic product that eclipsed Japan in 2010. The big question is will China pass the United States? When?
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Page 1: China's economy

UnitedStates

ChinaPROJECTIONS

+11% +10%

Currentgrowth

Long-termgrowth

Fastgrowth

Long-termgrowth

Currentgrowth

Fastgrowth

+7%

+4%

+3%

+2.5%

’80 ’85 ’90 ’95 ’00 ’05 ’10 ’15 ’20 ’25 ’30 ’35 ’40 ’44

0

5

10

15

20

25

30

35

40

45

50

$55

If China grows a little faster and the U.S. slows to its long-term trend, the U.S. would be number two by 2022.

FASTER CHINA

If the U.S. conforms to its long-term trend of 2.5 percent, and China slows to what some estimate is its likely long-term growth rate of around 7 percent, the year would be 2032.

LONG-TERM TREND

Assuming growth remains where it was in 2010 in each country, the lines would cross in 2024.

MORE OF THE SAME

GDP in trillions,not adjusted for inflation

SOURCE: International Monetary Fund ALICIA PARLAPIANO AND HOWARD SCHNEIDER /THE WASHINGTON POST

UnitedStates

China

+2.9

-2.6

+9.8

+7.2%

+14.2+3.8%

Annual GDP growth

’80 ’85 ’90 ’95 ’00 ’05 ’10

China’s way to the topChina’s economy is the world’s second biggest, with a $5.8 trillion gross domestic product that eclipsed Japan in 2010. Will China pass the United States? When?

There was a similar debate about Japan in the 1980s before growth stalled after a collapse in that country’s financial and real estate markets. Japanese growth has remained low ever since, an era known as the “lost decades.” Some analysts regard China as a bubble waiting to burst, and foresee a perhaps dramatic slowdown for the country — or at least to much less than the 10 percent growth it registered last year.

But there are major di�erences between Japan and China — perhaps most significantly their populations. With its wealth spread among roughly 1.4 billion people, per capita income in China remains low at around $4,200 — representing an immense potential for the country to extend development to its poorer regions.

Does that mean sustained, 10 to 11 percent growth is possible, or will China’s expansion slow to a more reasonable rate, say, 7 percent or less? As for the United States, its long-term trend GDP growth is around 2.5 percent. Will that be sustained going forward? Simply by extending last year’s growth rates for the two countries, China’s economy becomes the biggest in 2024.

GDP in trillions,not adjustedfor inflation U.S.

$14.6

$47,132

$42,325

$4,200

$5.88

$5.47

Japan

China

’80 ’10’00’90

GDP per capita,not adjustedfor inflation

U.S.

Japan

China

’80 ’10’00’90