The years do not live, and the seasons flow. In 2023, just as the world economy is gradually showing the dawn of recovery, the two major economies of China and the United States have shown different recovery rhythms. In the midst of the world's most high-profile economic comparisons, the latest data reveals a fact that cannot be ignored – the GDP gap between China and the United States has widened again, with China's economy falling to 64 percent of that of the United States5%。If you dig deeper, the reasons are complex and multidimensional, and it seems that every vibration of data is a reminder of how the delicate balance of the world economy is vibrating among various factors. What caused this?What are the factors that are quietly influencing the global economic landscape?Looking up at the starry sky, the economic picture in front of me gradually unveiled a corner of it.
The difference in the impact of the epidemic has exacerbated the divergence between the GDP growth rates of China and the United States
Looking back at 2022, China once became the focus of the global epidemic due to the outbreak of the new coronavirus variant Omicron. With city lockdowns, travel restrictions, and industrial shutdowns, economic dynamism is fragile in the face of the virus. Although China's industrial chain has a strong tolerance for internal circulation, the blocking of external circulation still brings a direct blow to economic growth. Although the time has entered 2023, the shadow of the epidemic still hangs over China's economy, and the industrial recovery in some important economic regions is weak, especially in the service sector and consumer sector, which is much slower than expected. At the same time, the fiscal stimulus package launched by the United States in early 2023 is like a shot in the arm. It not only creates jobs and stimulates consumption, but also indirectly accelerates the activity of the capital market, which is directly reflected in the GDP growth figures. The economic stimulus of the United States and the impact of the epidemic in China have created a huge disparity in the economic growth rate of the two countries.
Exchange rate fluctuations affect the GDP calculation of China and the United States
Behind the widening GDP gap between China and the United States, exchange rate changes also play a role that cannot be ignored. In the first half of 2023, against the backdrop of rising inflation in the United States and the expectation of interest rate hikes by the Federal Reserve, it has become an indisputable fact that the strong dollar has appreciated in the face of the renminbi, which makes China's GDP in dollar terms bound to suffer after currency conversion. Behind the rise in US inflation is the strong performance of its gross domestic product (GDP) data and the market's response to expectations of a recovery in the economy, which further triggered the attractiveness of US dollar assets, and the US dollar index continued to rise. Relatively speaking, the renminbi faced a certain degree of depreciation pressure during this period, which not only affected China's external costs, but also made the GDP measured in US dollars relatively reduced, thus widening the gap with the United States in terms of value.
The difference in statistical caliber leads to the comparison of GDP between China and the United States
Delving into the GDP gap between China and the United States again, a detail that cannot be ignored is the difference in statistical caliber between the two countries. China's GDP statistics are calculated in nominal terms, focusing only on the total amount of output and excluding the impact of price changes. This means that nominal GDP can be inflated by prices** under inflationary pressures, even if real growth is not strong. The GDP calculation of the United States uses the fixed ** method, that is, the so-called real GDP, which excludes the influence of price factors, making the data more realistic reflection of the actual state of economic growth. If measured by the same statistical terms – real GDP – China's real economy may not grow as rosily as the official figures, while the US may not be able to do the opposite. This difference invisibly exaggerates the GDP gap between China and the United States, and makes it difficult to compare the economic growth of the two countries.
At this point, the driving force behind the widening GDP gap between China and the United States has gradually become clear. From the direct impact of the epidemic to the hidden role of exchange rate changes, to the fundamental differences in statistical caliber, all these factors have combined to shape the current difference in economic growth rates between China and the United States. On the big chessboard of the global economy, each character is constantly adapting their strategies in response to change. Among them, China and the United States, as the two most important chess pieces, can affect the nerves of the global economy every time their economic data fluctuates.