“I think it’s very unlikely that … China will get to U.S. levels of GDP per capita — that’s our measure of wealth — for at least the next 50 years if ever,” Simon Baptist, global chief economist at the Economist Intelligence Unit, told CNBC’s “Street Signs Asia.”
GDP per capita measures an economy’s output per person and is a common gauge of prosperity.
The latest International Monetary Fund data available showed China’s GDP per capita was forecast to be $10,582.10 in 2020 — roughly six times smaller than $63,051.40 in the U.S.
“I see stiff competition with China. China has an overall goal — and I don’t criticize them for the goal. But they have an overall goal to become the leading country, the wealthiest country in the world and the most powerful country in the world,” Biden said.
“That’s not gonna happen on my watch,” he added.
U.S.-China may be ‘evenly matched’
Baptist said China will become “the other very large power” alongside the U.S. on the global stage. Which of the two is more powerful depends on where they wield that power, he added.
“I think in Asia, it probably will be very difficult for the U.S. to remain the most powerful country through the 2030s, but they’re going to remain evenly matched for quite a long time,” said Baptist.
China set to be world’s largest economy
The Chinese economy — in nominal U.S. dollar terms — is projected to overtake the U.S. around 2032 and become the world’s largest, said Baptist. That forecast was brought forward from 2034 because of the Covid-19 pandemic, he added.
China has bounced back sharply from the coronavirus-induced economic crisis. It became the only major economy to grow last year, after posting GDP growth of 2.3%. In contrast, the U.S. economy contracted by 3.5% in 2020 compared to a year ago, estimated the Bureau of Economic Analysis.
Baptist’s forecast appeared more conservative than others. Helen Qiao, head of Asia economics at Bank of America Global Research, told CNBC last month China’s economy would surpass the U.S. around 2027 to 2028.
The U.S. economy “ultimately will become smaller just because China’s population is so much bigger,” said Baptist. “Now it doesn’t really mean anything in particular when your dollar value of GDP takes over, but it’s a bit of a milestone.”