Recently, the U.S. Department of Commerce released economic data for 2023, with a GDP scale of 2737 trillion dollars, with an average increase in GDP of 25%。In terms of quarters, the GDP of the United States in the first quarter of 2023 is close to 6.$55 trillion, more than $6 in the second quarter$8 trillion, close to $6 in the third quarter$93 trillion, reaching $7 in the fourth quarter09 trillion dollars. This means that the United States only needs one quarter of GDP to kill large economies such as Japan and Germany.
Looking at the 2023 GDP data previously released by China, if it is denominated in RMB, the GDP will be 12606 trillion yuan, a year-on-year increase of 52%。But if converted to dollars, our country's GDP is 17$89 trillion. In this way, the GDP gap between China and the United States has reached 948 trillion US dollars, the gap widened by nearly 9$5 trillion. China's GDP is about 65 percent of the U.S. GDP36%, the gap between China and the United States has widened.
In this regard, many netizens wondered why the GDP gap between China and the United States widened to nearly 9 even though China's GDP growth rate was twice that of the United States$5 trillion. There are three reasons for this:
First, there is the issue of exchange rates
Starting in 2023, the Fed has continued to raise interest rates and shrink its balance sheet, which has led to the emergence of the US dollar index**, while non-US currencies represented by the yuan have appeared**. According to the data, the renminbi depreciated by 4 against the US dollar last year55%。In this way, if the RMB-denominated GDP is converted into USD-denominated GDP, it will suffer a lot. Therefore, it is not that China's economic development is not good enough, but that the depreciation of the renminbi to a certain extent has enabled the United States to take the lead.
Second, there is the issue of inflation
At the beginning of 2023, domestic inflation in the United States was as high as 65%, and after successive interest rate hikes by the Federal Reserve, the domestic inflation rate in the United States fell back to 34%。It is precisely the domestic inflation rate in the United States that has been on the high side, which has led to an increase in the cost of various living expenses for American residents, thereby stimulating consumption growth and further promoting the recovery of the American economy. Obviously, the high level of inflation in the United States is the reason why American residents are forced to increase spending.
Third, consumption is the driving force of the economy
U.S. economic growth is largely driven by consumption. According to data released by authoritative U.S. agencies, the U.S. consumer confidence index soared by nearly 30% last year, the fastest growth rate since 1990. Why is consumer confidence soaring in the United States? The main thing is that the United States** has been giving money to residents. When residents have money in their hands, they are naturally willing to spend aggressively, thereby stimulating economic growth.
However, the money sent to residents is also settled by borrowing, and in doing so, the United States is highly indebted. From $23 trillion in 2019 to $34 trillion by the end of 2023, the size of the U.S. debt has reached $1.1 billion in just four years. Obviously, the way to boost economic growth through borrowing for consumption is unsustainable and risky.
Now that the gap between the GDP of China and the United States has widened to nearly 9$5 trillion, so can't the gap in GDP size between China and the United States be narrowed? In fact, in 2024, as the level of inflation in the United States continues to fall, the Fed is likely to stop raising interest rates. At that time, the U.S. dollar index will fall, and the RMB will most likely enter an appreciation cycle this year. Therefore, the two major factors that will lead to the growth of the US economy in 2023 will be weakened.
At the same time, the United Nations has also recently made a decision on the Sino-US economy in 2024, and China's GDP growth will reach 47%, and the US GDP growth reached 14%。Obviously, China's economic growth in the next few years is full of momentum, and the GDP gap between China and the United States is expected to further narrow.