The coronavirus blockades in China mean that its economic growth may lag behind that of the United States for the first time since 1976, in a changing role with potential political repercussions in both Beijing and Washington.
The world’s second-largest economy will grow by only 2% this year, according to a report by Bloomberg on Thursday, informs “Today”. By comparison, US gross domestic product will increase by 2.8% this year. While Beijing is implementing fiscal, monetary and regulatory stimulus measures, the impact is blunted by President Xi Jinping’s zero-Covid policy, which calls for strict restrictions on activities when virus outbreaks occur. The United States, while struggling to cope with high inflation, is still driven by a strong labor market and consumer spending.
The forecast is at the bottom of the spectrum, with the average forecast for China’s GDP growth in 2022 still above 4%. If true, this year will be the first time China’s growth rate has lagged behind that of its rival since 1976, when China emerged from a tumultuous decade of the Cultural Revolution, according to World Bank data.
Following the reform and opening campaign launched in the late 1970s, China is enjoying a faster pace of expansion, and there are still many opportunities for per capita GDP to close the gap with the United States.
President Joe Biden, who is urging Congress to pass a package of laws aimed at strengthening US competitiveness against China, will certainly benefit from such a relative growth result. He designed his economic agenda in part to demonstrate whether democracies could oppose Xi’s authoritarian model.
“We suspect this is the main reason for the apparently aggressive growth goal: it was deliberately planted by the Beijing growth camp to curb further repression and restore a better environment for private sector prosperity,” he said. Jen earlier this month.
Politicians have indeed repeatedly made promises of more growth-friendly measures. Earlier this week, Deputy Prime Minister Liu He hinted that Beijing may be ready to give up pressure on technology companies.
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