How soon and at what height will China’s economy peak?
China’s economy can grow faster than America’s. The answer will affect far more than factory orders or personal incomes. It will shape the world order.
The previous consensus, both within and outside China, was that its economy would soon eclipse America’s. That, in turn, would allow China to become the world’s pre-eminent military power, and so supplant America as the world’s most powerful country. This remains a common view.
Yao Yang, a respected economist at Peking University, believes China’s GDP can overtake America’s by 2029. But others believe China’s economic clout relative to that of its rivals is nearing a peak. Hal Brands and Michael Beckley, two American political scientists, argue that China’s rise is already coming to a halt.
The age of “peak China", as they call it, is upon us—and it is far less Olympian a summit than most had predicted. In 2011 Goldman Sachs projected that China’s GDP would surpass America’s in 2026 and become over 50% larger by mid-century. No peak was in sight.
At the end of last year the bank revisited its calculations. It now thinks China’s economy will not overtake America’s until 2035 and at its high point will be only 14% bigger (see chart). China’s peak looks similar in an influential forecast from last year by Roland Rajah and Alyssa Leng of the Lowy Institute, an Australian think-tank.
Others see an even lower summit. Capital Economics, a research firm, argues that China’s economy will never be number one. It will reach 90% of America’s size in 2035 and then lose ground.
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