A number of important data sets were released in the past two days, including China's GDP, demographics and trade data for 2021. These numbers are well worth mentioning.
Let's start with GDP.
Our GDP in 2021 is 114.3 trillion yuan, which is about 17.72 trillion US dollars at an average exchange rate of about 6.45 (visually) in 2021. If the GDP of the United States in the same period is $21.5 trillion, then The size of China's economy is equivalent to more than 82% of the United States. In a group of scholars, some teachers found this percentage trend very encouraging, but some people countered that this number does not have to be taken seriously, the per capita is far from the United States, and the core components of technology and core components are still stuck in the neck.
My view is that although GDP is only a statistic, it is of great strategic importance to decision-makers around the world when assessing the balance of power in the world.
Once our GDP exceeds that of the United States, when China and the United States and other parties look at the world pattern, the consensus will undergo a major qualitative change, which will lead to changes in the judgment and behavior of some countries. The U.S. alliance system may even be "deleveraging." In addition to the comparison of the GDP of major countries, of course, there are factors such as scientific and technological strength, military strength, political influence, etc., but the most quantifiable and relatively objective factors are GDP and trade data. Therefore, I argue that China should achieve GDP (at market exchange rates rather than PPP) as a small milestone.
As the chart shows, since the end of World War II, few of the various challengers of the US Empire have been able to match the US. The curves of Soviet Russia and Japan are well worth playing. The eurozone is an exception because it is not a sovereign state, has no unified fiscal, and has no independent foreign and defense policies, so its GDP is close to that of the United States without triggering too strong a strategic backlash. The EUROZONE's GDP fluctuates around 80% relative to the United States. In the next decade, China's substantial surpassing of the United States will be a major change that has not been seen in a century. According to the power rate rule of the distribution of world economic activity, once China surpasses the United States, the ratio of China-US GDP will inevitably continue to rush up to 150% or even 200% before reaching a certain equilibrium state.
Of course, conversely, if we can't rush through, what does that mean? What would other parties in the international system think and do? It is worth pondering and vigilance.
Look at the import and export data.
In 2021, the total import and export value of the mainland's trade in goods will be 39.1 trillion yuan, an increase of 21.4% over 2020. Among them, exports were 21.73 trillion yuan, an increase of 21.2%,; imports were 17.37 trillion yuan, an increase of 21.5%. If denominated in US dollars, according to the average exchange rate of 6.45:1 in 2021, China's imports and exports exceed 6 trillion US dollars, with a growth rate of about 30%. On the basis of the high growth of the previous year, in 2021, the export of "home economy" related products such as notebook computers, tablet PCs and household appliances in the mainland increased by 13.2%; the export of pharmaceutical materials and drugs increased by 101.2%, which strongly supported the global fight against the epidemic. The general trade led by private enterprises has grown faster than the processing trade dominated by foreign capital, accounting for about 60%. In previous years, China had a large deficit in service trade, but due to the epidemic, the scale of traveling abroad and studying has been significantly reduced, and the service trade deficit has narrowed significantly.
The World Trade Organization forecasts a 10.8% increase in global trade in goods in 2021. The growth rate of the mainland's exports to the EU and Africa exceeded 20%, and the growth rate of exports to Latin America exceeded 40%. This means that the share of Chinese exports in global trade has further expanded.
A while ago, I chatted with several entrepreneurs in Quanzhou who specialized in import and export trade, and everyone complained that the export business in 2021 was a loss of money, and the profits were mainly lost by the sharp rise in material costs, soaring container freight rates, and strong RMB exchange rates. I think their problem may be a common problem of the traditional manufacturing and export industry on the southeast coast, and this dilemma and paradox may continue for a long time until the structural adjustment of the East Asian production network is really completed.
Some scholars and friends privately reminded that China's exports have accounted for more than 15% of global trade. If it rushes to 20%, it may mean more international conflicts, and we Chinese need to plan ahead. This sentence may sound very abrupt in the Chinese people, we exchange overtime labor and resources for your green paper pieces, and you even blame me for hating me? China accounts for nearly 20% of the world's total population and exports 20%, is it excessive? But if you understand the history of world politics and economy, in fact, what he said has a certain truth.
In my opinion, the most noteworthy is the rapidly changing trend in the automotive, especially the global new energy vehicle industry. The export growth rate of automobiles in 2021 will reach 119%, and its proportion in overall exports will also rise from about 0.6% that has been stable in the past 10 years to 1.0%. As new energy vehicles replace traditional vehicles around the world, China's huge deficits in vehicles, components and fuels are likely to turn into surpluses in the future.
I went to test drive a domestic brand electric car yesterday and felt quite good. Friends who understand the dynamics of the industry said that the rise of new forces of domestic electric vehicles is very fast. In the era of smart phones, the traditional well-known brands in Europe and Japan have been divided between China, the United States and South Korea, the United States has Apple, South Korea has Samsung, and China's Huawei, Xiaomi, OPPO, and VIVO are competing for deer. I feel that in the era of intelligent new energy vehicles, Japanese and European car brands are likely to repeat the fate of mobile phone brands such as Nokia Ericsson Motorola, and be cut down by Tesla in the United States and BYD, Weilai, Xiaopeng and other new energy vehicles in China. This process may be completed by 2035. At that time, some German workers, French workers, and Japanese workers will angrily smash Chinese cars on the streets to vent their anger, after all, it has been the main rice bowl in these countries for half a century. How do we plan ahead? In fact, we have a lot of things to do, such as making the domestic market bigger and selectively opening up, maintaining a strong exchange rate to actively balance our own balance of payments, and appropriately adjusting foreign investment policies.
In addition to the rising proportion of automobiles, the proportion of electronic components in overall exports rose from 3.9% in 2018 to about 8.0% in 2021. The share of integrated circuits in overall exports also rose to 4.6% from 3.4% in 2018. Behind these industry trends is China's continuous industrial upgrading. Recently, an article that has become popular online says that the footwear industry has lost hundreds of billions of orders in the past decade. First, the logic of this article is very absurd and greedy, and the money that has not been earned is regarded as a loss; secondly, from the perspective of the overall situation of world trade, it is not the vietnamese and Cambodian counterparts that are killing the Chinese footwear industry, but the rising Chinese new energy vehicles, electronic components and integrated circuit industries just mentioned, which are raising the cost of factors such as manpower, land and exchange rate to a level that the footwear industry cannot afford. This is a good thing for Young Chinese workers, but it is not necessarily a bad thing for shoe factory owners, because they can have a large number of customers in the local market who can afford to buy good brand shoes. My research among entrepreneurs in Quanzhou also confirms this.
Finally, I wanted to talk about population data, but recently many friends have provided a lot of analysis, and I have neither a deeper understanding nor a better way, so I will not repeat it. According to the newborn data disclosed in various places in the first three quarters, I originally thought that the newborns in 2021 would only be below 9 million, but I did not expect that there were more than 10 million in the whole year, and the inflection point of the total population from increase to decrease was postponed for another year, which is very good.