When will China outstrip the U.S. to claim the top spot in the world economic rankings? For Beijing, it would be convenient if everyone viewed that transition as inevitable and imminent. The reality is, it’s anything but. A debt crisis, demographic drag, and international isolation could all keep China stuck in perpetual second place. (This piece draws on Bloomberg Economics long-term growth forecasts first published in July 2021.)
On its current trajectory, China is set to overtake the U.S. and claim the global economy’s top spot in about a decade. But that outcome is far from guaranteed. Bloomberg Economics has modeled a base case and alternate scenarios: a China upside driven by successful reforms; a slower path dragged down by a shrinking population and international isolation; and Beijing’s nightmare, a debt crisis.