Chinese economy may never surpass US due to economic slowdown

Washington/Beijing – Bloomberg Economics, a leading website, has claimed, ‘China is downshifting onto a slower growth path sooner than we expected. The post-COVID rebound has run out of steam, reflecting a deepening property slump and fading confidence in Beijing’s management of the economy. Weak confidence risks becoming entrenched — resulting in an enduring drag on growth potential.’

Besides, there were estimations that the Chinese economy, which was growing fast until the end of the last decade, would overtake the United States as the largest economy in the world in the 2030-40s. However, due to the lockdown policy of the Corona era and other reasons, the decline of the Chinese economy has begun. Moreover, the international financial institutions and analysts had claimed that the Chinese economy would recover and grow at the same pace as before in a few months. Nonetheless, the Chinese economy constantly faces setbacks instead of this and the trend of economic decline continues.

The US’s top newspaper, The Wall Street Journal, pointed out last month that the economic growth model catapulting China to the position as the world’s second-largest economy was now over. Also, The Wall Street Journal mentioned in its article about China’s declining trade, rising debt burden, rapidly changing geopolitical and political equations, internal activities initiated by the Chinese government, new laws, etc. The Bloomberg Economics’ claims also seem to confirm this.

Furthermore, a graph released by Bloomberg Economics shows China’s economic growth rate slipping to 3.5 % by 2030. After this, there was an estimate of fall of 1%. Additionally, an earlier report had projected that China’s growth rate would be between 4.3% and 1.6 % from 2030 to 2050. However, Bloomberg Economics has claimed this will not be possible given the current decline.

Moreover, the Chinese economy is mainly export-oriented, and China is called the factory of the world. However, the rift between China and Western countries has widened in the last few years. The US and Europe are major centres of China’s exports, and the lack of demand there has been causing major setbacks to China, which had become the world’s factory. Due to the emphasis on exports, the Chinese government did not pay much attention to internal demand, which has started affecting the economy. A few days ago, it came to the fore that deflation had damaged the Chinese economy. Besides, analysts had warned that this incident could push the Chinese economy into a ‘lost decade’ like Japan.

Earlier to US media, a UK newspaper had also claimed that the plan of the ruling Communist Party of China and President Xi Jinping to establish economic supremacy over the world has failed. Eventually, the US’s top website sealed China’s economic decline by claiming that China will never become the world’s number one economy.