Share of World GDP and Population - China and the United States

May 12, 2021 - China

FAQ

1. Why does China matter?

The United States has been the largest economy in the world for over 100 years. However, China has a much larger population. Since the late 1970s reforms, China has experienced rapid growth. It is now on track to be the largest economy in the world, and by some measures, it already is, such as Purchasing Power Parity. Not only could it become the largest, but it could also dwarf the United State's economy in size. It could even become larger than the economies of Europe and North America combined. However, China faces a population growth decline that should limit its relative size by 2100. So its potential dominance isn't as great as it currently seems.

2. Where is China's share of world GDP headed?

The per capita income of China is still far below the United States. So there is a lot of room for growth. However, the population advantage is shrinking. So instead of becoming 50-60% of the world economy, China may only get to 30-40%. Instead of the US falling to 12-13% of world GDP, the US may only fall to 15-16%.

3. What is GDP?

Gross Domestic Product (GDP) was first developed in the 1930s to understand the Great Depression. It measures the production in an economy. The bigger the GDP, the more a country can produce. The value of production is also equal to the income of the economy.

4. What reforms did China undergo in the late 1970s?

Mao Zedong ruled the communist People's Republic of China from when it was founded in 1949 until his death in 1976. His death then created an opening for alternative economic models to take root. The communist system in China did not lead to the economic gains that more capitalist systems could achieve in that period. So the new economic reforms borrowed from capitalist principles. The impact was small in relative terms compared to the world, but as China has grown, China's impact on the world economy has grown.

5. Why is China's population growth falling?

From 1979–2015, China had a "one-child policy" where families were only allowed to have one child, although up to 50% of the population may have been able to have up to two children. China's population is expected to peak in 2031 at almost 1.5 billion and fall to under 1.1 billion by 2100. In that same period, the US population is expected to grow from 351 million to 434 million.

6. What are the population percentage lines after 2019?

Those are estimates based on projections from the United Nations and can be found at Macrotrends.