Kunpeng Project
In 2023, both China and the United States have announced their GDP, and they are both performing well. But to compare, China is still one size behind the US GDP in 2023. The gap between China and the United States was $5 trillion in 2021 and $7 in 20224 trillion dollars, and then in 2023 it is 9$41 trillion, growing every year.
In 2023, China's GDP will grow by 52% compared to 2 in the United States5%, in terms of growth rate, China's performance is more than twice that of the United States. However, in terms of total GDP, the United States is ranked at 27$73 trillion is far ahead, while China is at 17$89 trillion, equivalent to only 65% of the United States. Why is the gap between China and the United States getting wider, and why is China's share of GDP declining in the United States? In fact, the problem is not so much in China as in the United States.
First of all, the exchange rate. When comparing the GDP of each country with that of the United States, it must first be converted into US dollars. The exchange rate is unstable, and if it fluctuates slightly, it is difficult to accurately reflect the economic strength of a country. The U.S. keeps raising interest rates, and the renminbi depreciates against the dollar, and when converted into dollars, our GDP figures shrink. Therefore, it cannot be said that China's economic progress is weak, but that the exchange rate is at fault. Second, inflation in the United States has pushed up their GDP figures. But this is only scratching the surface, and if we really want to talk about the fundamentals, it depends on the essential differences in the structure of the economy and the way of growth between China and the United States.
First, there are differences in GDP composition and statistical methods between the two countries: China uses a production method that focuses on the value added of the three major industries, while the United States uses an expenditure statistical method that focuses on personal consumption, ** spending, investment, and net exports. In 023, the added value of China's primary industry will account for 7% of GDP12%, and 38 in the secondary sector28%, 54% in the tertiary sector6%, reflecting the transformation of China's economy from heavy industry to services. In contrast, the U.S. has a very low proportion of the primary industry and more than 80% of the tertiary industry, indicating a highly developed economic structure in its service sector.
Compared with the secondary industry, especially in the manufacturing sector, China has ranked first in the world for 14 consecutive years, and the scale of the manufacturing industry is 1 of that of the United States78 times, reflecting China's status as the "world's factory". However, in recent years, the United States has not only rebounded the added value of its manufacturing industry through the manufacturing reshoring policy, but also highlighted the transformation and upgrading of the manufacturing industry to be more competitive. Although China has an advantage in the scale of manufacturing, it still needs to catch up in high-end manufacturing, technological innovation and other fields.
Tertiary Industry Comparison: The tertiary industry in the United States, especially the information industry, professional and business services sectors, has contributed a lot, reflecting the high degree of servitization and digitalization of the U.S. economy. Although China is growing rapidly in the tertiary industry, it still needs to learn from the advanced experience of the United States in terms of the depth and breadth of its service industry. The huge contribution of U.S. personal consumption to GDP and the role of spending in economic growth show the characteristics of the U.S. domestic demand-driven economy, while China needs to make greater efforts to expand domestic demand and increase the proportion of the service industry.
The GDP growth of the United States is largely dependent on personal consumption and spending, of which personal consumption accounts for nearly 70% of GDP and is the main force driving economic growth. The huge fiscal spending of the United States** is also steadily pushing up the total GDP. However, there are some special computational items, such as virtual rents in the consumption of private services, which, while technically increasing the total amount of GDP, have sparked discussions about the size of their contribution to real economic activity.
Catching up with the total GDP of the United States is a difficult task for China, not only because of the fundamental differences in the economic structure of the two countries, but also because of the unique way the United States grows its GDP. Although the GDP gap between China and the United States is widening in aggregate, a deeper comparison should focus on indicators such as real income and quality of life of residents, which can more fully reflect the real differences between the two economies and societies. Facing the future, China needs to make greater efforts to improve its own economic structure and improve the living standards of its residents, rather than just focusing on the total GDP competition.