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China, God’s gift is over: in 2022 the United States will grow more than Beijing

1976. 46 years ago. There are still no formal diplomatic relations between the United States and the People’s Republic of China (now in high tension over the Taiwan issue). The last year in which the US economy grew faster than the US economy at that time should be dated. But the number could soon be updated until 2022. That’s right. According to a report by Bloomberg Economics, the Chinese economy will grow by only 2% this year, thanks to the frequent shutdowns required by the very strict Zero Covid policy, which has reduced the impact of the fiscal stimulus measures implemented by Beijing.

The political impact of the slowdown in the Chinese economy

If the study is correct, US growth in 2022 will outpace Chinese growth for the first time since 1976, when China was emerging from the turbulent decade of the Cultural Revolution. Indeed, it is estimated that the United States will grow by 2.8% and that Biden is already grabbing the ball: Congress is already debating a set of laws aimed at strengthening the competitiveness of the United States against China.

The stakes are even higher for Xi, who aims to secure a third term in Congress next fall: a 2% growth rate would be well below the government’s official growth target of about 5.5% this year. A 2% expansion would also be lower than in 2020, when the pandemic drove GDP growth to 2.2%. In 1990, following the Tiananmen Square crackdown, China’s much smaller economy grew by 3.9 percent.

It would be a major blow to the Communist Party’s rhetoric and the inevitability of China’s rise to the world’s leading economy. Although many believe that the stopping point is only temporary and that, even if in 2022 the United States will indeed grow more than China, in 2023 the rubber band will return to the other side with a strong counter-overrun. But between now and 2023, there is a conference in which Xi must secure a historic third term. And a slowing economy isn’t a great calling card.

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Earl Warner

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