The Economy of The United States and China (Essay Sample)

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The Economy of US and China
China and the United States are the leading global economic powers, even though China takes the second position. Economists have projected that China could overtake the US by 2028, but the recent outbreak of Covid-19 has caused experts to extend the prediction to the year 2031. The intensification of the competition between the two powers has triggered rivalry that has seen the US impose tariffs on goods imported from China. America’s popularity at the global level has been waning, while China has attracted significant popularity from Asia and Africa. One cannot predict the exact date when China will overtake the US in terms of economic growth, but China has made significant economic steps towards this goal. This paper discusses the current state of China in its pursuit to becoming global economic power, the trade war with the US, and the impact of Covid-19 outbreak on the economic trend of the two countries.
China and US Economic Overview
The size and growth rate of the Chinese economy and its competition with the US cannot be ignored. Both countries are at the top in terms of purchasing power parity (PPP) and nominal gross domestic product (GDP). According to Jennings, China is above the US in terms of PPP GDP, while the US leads China in terms of nominal GDP. Nominal GDP is assessed as the current prices of goods and services in an economy without making an adjustment for inflation. GDP is the total value of goods and services that a given economy produces (Statistics Times). China overtook the US in PPP in 2017 and it has maintained the position to date, while the US has maintained the leading position in nominal GDP. According to Walmsley et al., the US led as a global economic power by $6,033 billion on the nominal GDP basis by the year 2021, while China led the world on the purchasing power parity by $3, 982 billion by the year 2021.
Differences in population account for differences in nominal GDP and ppp GDP for the two countries. According to Zhong et al., the population of China is more than four times the population of China. This explains why the US has a per capita income or income per person of 5.78 or 3.6 times than China, both in terms of PPP and nominal. The World Bank