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Will the United States, with its population of 325 million and $18 trillion Gross Domestic Product (GDP), continue its reign as the economic heavyweight champion of the world? Or, will China, with its 1.3 billion inhabitants and $11 trillion GDP take down the venerable USA? Current oddsmakers maintain that the US is the standing favorite over the next 10 years. What happens afterwards?
Bloomberg published an article last May comparing the long term forecasted GDP growth rates of the two global titans, which was compiled from World Bank and Census Bureau data. The predictions assumed compounded annual growth rates (CAGR) of 6.5% for China and 2.0% for the United States; based on those assumptions, China’s economy is poised to surpass the US within the next 10 years. If China sustains over 6.00% growth, it will benefit not only China, but the entire world, which is a good thing. These assumptions were made last year. Now, Trump’s administration is targeting 4.00% compounded annual GDP growth. At 4.00% Gross Domestic Product CAGR, it would take at least 20 years for China to catch up.
