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In recent years, the economic power of China and the United States has occupied an important position in the global landscape. However, the gap between the GDP of China and the United States has gradually widened, which has attracted widespread attention. There was once an economic theory called the "70% curse", that is, when a country's GDP reached 70% of the GDP size of the United States, economic development may be constrained, or even stagnate and regressed. Although this theory has not been fully proven and recognized, it seems to be confirmed by past historical cases.
1. The decline of the Soviet Union
In the late 70s of the last century, the GDP of the USSR at one time reached 70% of the GDP of the United States. Taking this as an opportunity, the United States imposed a new round of economic sanctions on the Soviet Union and hit the Soviet economy by launching the "Star Wars program". These initiatives eventually led to the collapse of the Soviet Union in 1991.
Expansion: The collapse of the Soviet Union was a complex historical process, and in addition to economic factors, several factors such as political, social, and military also played an important role. But the economic sanctions imposed on the Soviet Union after it reached 70% of the GDP of the United States, undoubtedly exacerbated the economic difficulties of the Soviet Union.
2. The loss of Japan
In Japan's economic development in the late 80s of the last century, Japan's GDP once exceeded 70% of the GDP of the United States. However, the Plaza Accord was signed by the United States, Britain, France, and Germany, which weakened Japan's export competitiveness and forced Japan to begin large-scale development of the real estate industry by making the yen appreciate sharply. Subsequently, Japan's real estate bubble burst and the economy continued to slump, which became known as the "Lost Thirty Years".
Expansion: The bursting of Japan's housing bubble was not entirely caused by GDP reaching 70% of the size of the United States, but more due to a variety of reasons, such as an unhealthy financial system and excessive land speculation. However, the sanctions on the Japanese economy and the impact of the appreciation of the renminbi on its foreign trade have undoubtedly exacerbated the bursting of the bubble and the continued economic downturn.
3. The rise of China
After China joined the World Organization (WTO) in 2001, its economy began to grow rapidly. By 2010, China's GDP had surpassed Japan's, making it the world's second-largest economy. Subsequently, China's economy continued to grow at a high pace, from 39 percent of the US GDP in 20103% have been catching up to 73 in 20215%。By 2030, China is expected to surpass the United States to become the world's largest economy.
Expansion: China's rise is the result of years of comprehensive reform and opening up, and also takes advantage of China's huge demographic dividend and market potential. China has promoted rapid economic growth by actively expanding its foreign countries, attracting foreign investment and driving innovation. In addition, China has adopted a series of macroeconomic regulation and control policies to strengthen its management and control over the economy.
However, from 2022 onwards, the GDP gap between China and the United States began to widen again. Especially after entering 2023, the GDP gap between China and the United States will exceed 7 trillion US dollars, and China's GDP will account for less than 65% of the GDP of the United States. This has left many people wondering why the GDP gap between China and the United States, which has narrowed in the past, is now widening. Does it mean that the "70% curse" is coming again?
Expansion: The widening GDP gap between China and the United States is likely due to a number of factors. On the one hand, the rapid growth of the US economy is due to the contribution of inflation. The inflation level in the United States continues to rise, leading to the highest prices, prompting an increase in consumer spending, which further boosts the GDP growth of the United States. On the other hand, the Fed's successive interest rate hikes have led to the appreciation of the US dollar, which has depreciated the currencies of other countries relative to each other, affecting the GDP data denominated in US dollars.
1. The impact of the "70% curse" on China
While the GDP gap between China and the United States is widening, the "70% curse" does not apply to China. China's economy is resilient and adaptable, and can effectively respond to changes in the external environment. China has huge market potential and strong domestic demand, and factors such as infrastructure construction and consumption upgrading will continue to drive China's economic development. As a result, China is still expected to achieve better economic growth in the future, even if the GDP gap widens.
Expansion: China's economic power has gradually increased, and its international status has been rising. China actively participates in global economic governance, strengthens cooperation with other countries, and promotes the building of a community with a shared future for mankind. China's economic development has had an important impact on the world economic situation and injected new impetus into global economic growth.
2. The comprehensive influence of various factors
While the "70% curse" may seem to have some basis in some cases, it is not possible to simply reduce all economic woes to a single number. In fact, economic development is the result of a combination of factors, rather than a single number. Changes in politics, society, culture, technology, etc., can also have a significant impact on the economy, so a country's economic destiny cannot be judged solely on a numerical basis.
Expansion: Economic development is a complex and dynamic process that involves a variety of factors. The interaction of various factors must be comprehensively analysed and considered in order to accurately assess a country's economic situation and development potential. In formulating economic strategies and policies, it is necessary to conduct in-depth research and understanding of the multidimensional factors of economic development in order to achieve sustainable and stable economic growth.
Overall, the widening GDP gap between China and the United States does not mean that the "70% curse" is at work again. Each country's economic development has unique characteristics and conditions, and the influencing factors of economic development are also diverse. Therefore, it is not possible to simply apply a theory to interpret complex realities. For China, it is important to keep a cool and sober mind, continue to deepen reform and opening up, and strengthen innovation-driven to respond to the challenges and challenges of change, promote sustained and healthy economic development, and lay a solid foundation for achieving high-quality development.
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