Chinese officials say the race for global economic dominance will be decided not just by the sheer size of the country’s total output but also by the elements included in that output.
In 2021, China’s GDP surpassed that of the EU for the first time. Not only did the milestone take place a year earlier than the International Monetary Fund had predicted in October, but it also put China on track to possibly overtake the US as the world’s largest economy sooner than 2030, as had been forecast.
Exceeding Beijing’s target of 6% or more, China’s real GDP increased by 8.1%, to about $18 trillion in 2021, according to data from the country’s National Bureau of Statistics. By contrast, the EU’s real GDP grew only 5.2%, to roughly $17 trillion, notes the European Statistical Office. By way of further comparison, the US real GDP grew to approximately $23 trillion in goods and services, or a 5.7% increase, according to the US Bureau of Economic Analysis.
Yet, despite the strong show of resilience during the second year of the pandemic, Chinese officials say the race for global economic dominance will be decided not just by the sheer size of the country’s total output but also by the elements included in that output.
“China’s growth trajectory, driven by being the ‘workshop of the world’ and investment in infrastructure and real estate, is universally acknowledged,” says Chris Rowley, an economist from Kellogg College at the University of Oxford and at Bayes Business School of City, University of London. “Nevertheless, there is broad consensus that growth cannot continue indefinitely; as after a certain stage, all economies slow down and growth is stymied—and China is no exception. A shift in the mix of growth drivers towards more high productivity, value-added, high-tech and innovative sectors is required.”
He adds that China’s growth is even more critical, as the country needs enough to finance its aging population. “There is the continuing fallout of the former one-child policy at play, as well as the fear of being a nation growing old before it grows rich. Furthermore, China must keep not only its massive working class but also its middle class and elites happy while at the same time tackling inequality, which may be being acknowledged by the increasingly used clarion call for ‘common prosperity’ in government exhortations.”