China’s current economy vs. USA. Which numbers would you prefer for your country?

1. GDP Growth

China

USA

China GDP growth in US$ Purchasing Power Parities (PPP) 1993-2023

China Writers’ Group member Godfree Roberts (https://herecomeschina.substack.com/)

Note: starting 2024, China’s GDP growth in exchange rate terms is 5.3% per annum, vs. 2.9% for the USA. As the first bar graph shows, this trend has accelerated in the last 10 year. In Purchasing Power Parity terms, the only accurate way to compare apples to apples, the difference is much greater. This is seen in the second bar graph, expressed in annual growth.

2. Inflation

Note: China has had deflation recently, which is great for consumers, but over time is unhealthy for the economy, as it puts a break on the manufacturing and service sectors. Notice the graph scales for China and the US. China’s is only 1% and America’s is 5%. For 2024, China’s inflation averages close to zero, so its 5.3% GDP growth nets exactly that. The US’s inflation averages about 3.2%. Against 2.9% GDP growth, America’s net growth is negative 0.3%.

3. Consumer spending

Note: China’s savings rate is almost 10 times higher than the US’s and 2.4 times more than Europe. This is an indication of disposable income, which the Chinese have, Europeans have a little and Americans almost none. More than 85% of Chinese own their home and 2/3 of those own them free and clear, far more than the West, so they are not saddled with rent/mortgage payments every month, which makes a big difference. Ten years ago, China’s savings rate was about 45%, so they are spending more.

Note: after cratering during the global Covid lockdowns, Chinese travel is rebounding to earlier levels. Many people do not realize that for many years, China has been the #1 outbound and #3 inbound tourist country. By the end of 2024, it looks like China will regain its historical position.

Note: retail sales are rebounding after the plandemic, with travel and electric vehicles being the champions.

Note: Just this month for the first time, EVs outsold internal combustion engines (ICE). Thus, in just four years, China’s car market has gone from 5% EV to 50% This kind of rapid market transformation is historic and unprecedented. As I have reported, Western brands are way behind in EV development and will be left holding the bag, unless they catch up. Otherwise, they will miss out on the world’s biggest car market.

China Brief: Consumers Are Spending Again (Outside of China) | McKinsey

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