Chinese President Xi Jinping.
Photo:
Andy Wong/Associated Press
China’s ruling Communists believe the U.S. is in decline while they are the vanguard of history, but perhaps they’re getting ahead of themselves. That’s the latest judgment of the Japan Center for Economic Research (JCER), which now assesses that China’s economy won’t surpass America’s in size by 2035 after all.
JCER issues a periodic assessment of trends in Asia-Pacific economies, and as recently as 2021 it forecast that China’s nominal GDP would exceed America’s by 2029. No longer. The Japanese think tank now estimates that the U.S. will maintain a healthy lead over the People’s Republic, with U.S. GDP exceeding $41 trillion in 2035. China’s will be closer to $36 trillion.
The reason? President
Xi Jinping’s
policies and the global reaction to them. “The Xi Jinping regime in its unprecedented third term, the zero-COVID policy, and the U.S.-China decoupling that prevents access to advanced technologies become a heavy burden on the Chinese economy,” JCER economists write in a report issued last week.
The economists forecast that China’s GDP growth rate will fall to the 2% range in the 2030s, and perhaps lower than that, assuming Mr. Xi’s rule continues into a fourth five-year term through 2032. China’s declining labor force will also weigh on growth.
“We assumed that labor, capital, and Total Factor Productivity (TFP) will be all adversely affected by tightening IT restrictions for Chinese firms, growing concerns about a Taiwan contingency, and the continuation of moderate zero-COVID policy,” says the report.
Notably, much of this is self-inflicted, which may come as a surprise to Americans on the right and left who claim to admire Communist efficiency. The “decoupling” from Western technology is a backlash against the intellectual property theft, spying and political bullying that have marked the Xi regime.
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