The new round of data surveys conducted by the International Comparison Project (ICP) has been almost completed, and a new exchange rate between the renminbi and the U.S. dollar is expected to be available early next year. ICP is an international statistical activity jointly implemented by the United Nations Statistical Commission, the World Bank and other international organizations to measure the difference in price levels across countries. According to the latest data, China's purchasing power exchange factor is 399, which means 3The purchasing power of 99 RMB in China is equivalent to the purchasing power of 1 US dollar in the United States. And according to this new ratio, China's GDP in 2022 will reach 12102 trillion yuan, equivalent to 3025 trillion dollars, compared to 25 trillion in the United States$46 trillion is much higher. This means that China will overtake the United States to become the world's largest economy.
The release of the ICP's findings has attracted the attention of the Financial Times. In an article titled "I'm Sorry America, China's Economy Is Bigger Than You," they argue that exchange rates distort the performance of real purchasing power, often overestimating the purchasing power of the dollar and underestimating the purchasing power of developing country currencies, including the renminbi. If the size of the U.S. and Chinese economies were recalculated based on the conversion factors between the real purchasing power of each country's currency, China would overtake the United States as the world's largest economy.
Professor Stephen Brooks holds a similar view, arguing that China's nominal GDP is only about 70% of that of the United States in exchange rate terms, but that it will surpass that of the United States when measured in purchasing power parity terms. At present, the reason why the United States still maintains the world's first position is mainly because the dollar is a strong currency, and the demand of many countries has pushed up the exchange rate. Once the world's dependence on the dollar declines, the position of the United States may also be shaken.
The possibility of China's economy overtaking the United States has sparked widespread discussion. In addition to the impact of the ICP findings, there are other factors contributing to China's economic rise. First of all, the Chinese population is large and the consumer market is huge. With the acceleration of China's urbanization process and the increase in the income of rural residents, China's consumer demand continues to grow, providing a solid foundation for economic growth. Second, China actively promotes scientific and technological innovation and industrial upgrading, and continuously improves its independent innovation capabilities and high-end manufacturing levels. China has made major breakthroughs in high-speed rail, electric vehicles, 5G and other fields, which have promoted rapid economic development. Third, China has actively promoted globalization and regional cooperation, strengthened economic and trade exchanges with other countries, and expanded its international market share.
China's economic overtaking of the United States will not only mean an increase in economic power, but will also have a profound impact on the world. First of all, the rise of China's economy will bring more investment opportunities and market potential, attracting global enterprises and multinational companies to increase investment and cooperation in the Chinese market. Second, China will play a more important role in global affairs, participate in global governance and decision-making, and provide more public goods to the world. At the same time, China also needs to deal with a series of new challenges brought about by its rise, such as strengthening the management of domestic and foreign funds and risk prevention and control, improving the transparency and stability of financial markets, and promoting domestic industrial upgrading and innovative development.
It is a historic moment for China's economy to surpass that of the United States. As an international editor, I deeply feel the importance and significance of China's economic rise. China's rise is not only economic, but also reflects the enhancement of China's comprehensive national strength and international competitiveness. China's rise will drive the world's development and prosperity, providing more opportunities and choices for the world.
However, China will also face a new set of challenges and responsibilities. China needs to maintain economic stability and sustainable development, properly handle economic and trade relations with other countries, and promote fairness and inclusiveness in the process of globalization. At the same time, China also needs to strengthen its own innovation capabilities and research and development of core technologies, increase investment in education and talents, and improve its international competitiveness and innovation-driven capabilities.
In short, China's economic rise surpassing that of the United States is a historic turning point and a new starting point. China needs to seize this opportunity, actively respond to challenges, and make greater contributions to the realization of the Chinese dream of the great rejuvenation of the Chinese nation. At the same time, the world also needs to prepare for this new pattern and actively promote the goal of building a community with a shared future for mankind.