Per Capita GDP of China vs. the United States (Forecast using Japan)
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FAQ
1. Why does it matter if China catches up to the same GDP per capita as the United States?
China, even in 2021, is the largest economy by PPP and is the second-largest by GDP behind the United States. As of 2019, China also had 1.398 billion people compared to the United States, only having 328 million people. So if China reaches the same GDP per capita as the United States, it will be a far larger economy than any other economy in the world.
2. Is Japan a good guide for when China may reach the United States in terms of GDP per capita?
Japan gives some guidance as to what is possible. Japan had 92.5 million people in 1960, while the US had 180.7 million people. So the US was still almost twice as large as Japan. China is over 4x as large as the US currently. So they may face hurdles due to their size. However, their size is also a benefit. Companies worldwide will have a large incentive to obtain access to China's market by giving China the technology it needs to reach the US in terms of GDP per capita.
3. Why has Japan fallen so much in the past 25 years?
In terms of PPP per capita, Japan has continued to grow. In terms of GDP per capita, Japan has not. This disparity is due to the impact of exchange rate fluctuations.
4. Is PPP or GDP a better measure to use?
PPP is a good measure of how well off the people in a country are. However, GDP is good in terms of how much of an impact the country can make globally. For a country to buy or invest in another country, an exchange rate will have to be used.