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Since the reform and opening up, China's economy has continued to develop, surpassing Japan in 2010 to become the world's second largest economy.
In 2010, China became the world's second largest economy).
Since then, China has continued to catch up, and its total GDP continues to approach that of the United States, up from 39 in 20103%, to 73 in 20215%, looking back on the process of China's step-by-step journey, Chinese people will feel excited.
However, in 2022, the GDP gap between China and the United States has widened again, up from 6.0% in 202108 trillion expanded to 736 trillion, China's total GDP also fell to 71% of the total GDP of the United States.
According to the situation in the first half of this year, the gap between China and the United States has further widened at an astonishing rate, with the difference exceeding 7 trillion yuan in the third quarter, and the proportion has dropped to less than 65%.
What's going on, is the legendary 70% spell fulfilled again?
70% enchantment
The so-called "70% curse" is an interesting phenomenon in the contest between the United States and the world's second-largest economy.
The specific implication is that when the world's second-largest economy has a total GDP of 70% or more than that of the United States, some problems arise, causing the growth of the world's second-largest economy to slow down or even recession, while the United States is able to maintain or restore its economic advantage and leading position.
The first country to hit the 70% curse was the former Soviet Union, whose GDP rose rapidly in the late 70s to 70% of the United States, according to the Soviet Union itself.
As a result, not long after this achievement was achieved, the former Soviet Union began to decline, and the country became a mess, eventually ending in disintegration.
The second victim of the "70% curse" is Japan.
From the 70s to the mid-90s, Japan's economy grew rapidly, becoming the world's second largest economy, and by 1995, its total economy reached 555 trillion, and in the same year, the total volume of the US economy was 764 trillion.
Japan's economic development is stagnant).
After Japan's economy surpassed 70% of that of the United States, the "70% curse" quickly showed its power.
Since 1995, Japan's economic development has come to a standstill, and today's total GDP is not as good as it was then, and the gap with the United States is naturally widening.
Of course, when it comes to what happened to the former Soviet Union and Japan, we all know that the United States has done a lot of things behind this.
The economic development of the former Soviet Union was already uneven, overly dependent on heavy industry, the proportion of foreign exchange and energy was large, and the United States also deliberately lured the Soviet Union to start an arms race with the United States, which made the Soviet Union's economy have huge hidden dangers.
In the 80s, the United States pressured Saudi Arabia and other Middle Eastern oil-exporting countries to increase production, which caused the previously high international oil prices to fall, and the Soviet economy was severely hacked.
The United States pressured Saudi Arabia to increase production, and international oil prices fell).
In addition, the outbreak of domestic economic imbalance and contradictions, and the disrupted hands and feet by the European and American cultural offensives, finally fell into disintegration.
As early as 1985, Japan was planted by the United States with the "Plaza Accord", which seemed to be a high-speed economic growth, but in fact it was full of bubbles, and after being picked up by the United States, it finally fell into the dilemma of stagnation of development.
But now, even though China's economic development is still generally stable, it was still redistanced by the United States shortly after its total GDP just crossed 70%.
U.S. Darkness Chencang
Many people really don't understand this, because the economic situation of the United States in the past two years should not be very good.
If it were not for its own poor economic development, the United States would not have changed its previous stance of "decoupling" from China this year, and instead emphasized the importance of Sino-US economic cooperation.
U.S. ** Yellen wants economic cooperation with China).
What is the reason why the GDP gap with China has widened again while the economic situation is not good?Is it true that the United States is "destined for heaven" and that no country's economy can exceed the 70 percent threshold of the United States?
In this regard, some economic experts pointed out that China does not need to pay too much attention to GDP data, because although this data can reflect the state of economic development to a certain extent, there is a lot of "room for maneuver".
First of all, in order to make comparisons, when calculating GDP, it is necessary to convert the exchange rate, and the exchange rate between the RMB and the US dollar is not fixed, but constantly fluctuating.
In 2021, the renminbi performed strongly, trading at an exchange rate of 6 against the US dollar3-6.6 range**, but in 2022, there has been a depreciation, and the exchange rate once reached 73. It only rose to 6 at the end of the year9, and in 2023, the RMB exchange rate will be close to 7 for a long time2。
RMB exchange rate in 2023).
As a direct result, China's GDP has been significantly reduced after conversion.
In addition to the exchange rate factor, there is another point that needs to be paid attention to, that is, the inflation factor.
Inflation refers to the situation of prices, after prices, the same amount of products creates more GDP for the country.
Since inflation hurts the interests of ordinary people, China has always been cautious about this, and often takes relevant factors into account when formulating policies, so China's inflation rate has always been stable at around 2%.
But the United States did not have this consideration, and in 1980, it even pushed inflation to 14Amazing height of 8%.
Since 2021, inflation in the United States has been rising, and by June 2022, the inflation rate in the United States has increased to 91%。
U.S. inflation rate trend).
Although in the second half of 2022, the United States entered a cycle of interest rate hikes and high inflation has eased, it is still much higher than China's inflation rate.
However, with the aggressive interest rate hike policy in the United States, by September this year, the inflation rate in the United States had fallen to 37%, and as high inflation in the United States shows an easing, the United States is also preparing to end interest rate hikes in order to prevent excessive interest rate hikes from causing a recession in the United States.
After that, both the false growth led by inflation and the strength of the dollar during the interest rate hike cycle will leave the United States, and the GDP ratio between China and the United States will soon catch up.
Economic experts remind us that this kind of "rapid economic growth" with moisture in the United States is not worth paying attention to, but when the United States ends raising interest rates and enters the cycle of interest rate cuts, the harvest is really worth watching.
References
RMB Exchange Rate Trend: The Dialectical Unity of "Normality" and "Impermanence", China Foreign Exchange, No. 4, 2022.
The "2022 Annual Report on the RMB Exchange Rate: The RMB Exchange Rate Opens a New Cycle" released by the CBN Research Institute!CBN.
Zhang Ming |RMB Exchange Rate Trend against the US Dollar: 2023 Review and 2024 Outlook Chief Economist Forum.
The Federal Reserve has managed inflation this year according to CBN.
Short-lived reflation – September 2023 US CPI data review China Merchants Bank.
Fed authority ** hints that "rate hikes are over" His weight on monetary policy is second only to Powell's Financial Associated Press.