Wells Fargo: In 2042, China will surpass the United States to become the world's largest economy

Since the mainland's economic aggregate surpassed Japan to become the world's second largest economy, when it surpassed the United States' economic aggregate has been discussed, becoming the world's largest economy is not only symbolic, but also substantial, which represents the mainland's overall economic strength, but also means that the east rises and the west falls.

This issue was often discussed a few years ago, when Sino-US relations were still good and the mainland's economy was growing rapidly, so some economists at that time believed that by 2030, the mainland's economy would surpass the United States and become the world's largest economy.

However, in recent years, due to the successive occurrence of many uncertain events, from viruses to local military conflicts, especially internal and external challenges, the timeline of when the economic aggregate will surpass that of the United States has also begun to be postponed.

Economists at Wells Fargo in the United States have come to the conclusion of their research on this issue. They believe that the continent will eventually overtake the United States as the world's largest economy in terms of economic size, but that it will take longer to achieve this goal, possibly until around 2042.

In 2042, in fact, almost 18 years later, the mainland's economic aggregate will surpass the United States and become the world's largest economy.

But Wells Fargo, as a banking institution in the United States, is naturally not at ease.

In Wells Fargo's article, analysts at the bank have been bearish on the mainland economy in recent years, and even in its recently released 2024 International Economic Prospects report, they harshly criticized the huge challenges facing the mainland's economy, including a labor force due to a sharp decline in the birth rate, a deep crisis in the real estate sector, and problems such as austerity, high corporate debt and weak consumption.

Wells Fargo believes that this will make the mainland's economic growth encounter serious difficulties.

In my opinion, there is no doubt that these are unwarranted smears and shameful attacks by Wells Fargo on the mainland's macroeconomy.

After all, the recession of the United States is obvious to all, and in the next 10 years or so, the mainland's economic aggregate will certainly surpass the United States and become the world's second largest economy.

Breaking the first monopoly of the U.S. economy also indicates the backwardness and recession of the U.S. economy.

Of course, it is only a matter of time before the US economy is surpassed, but looking back at our own internal economic structure, it is undeniable that there are some risks.

First and foremost is the inventory problem in the real estate industry.

The chief economist of Sirui Group has said that according to his observations, it will take about two years for the inventory in the mainland real estate market to be sold out.

But if you look at the current number of houses under construction, the total area is about 6 million square meters, and at the current rate of sales, it may take about a decade to sell out the houses under construction.

Weak demand in the real estate market will inevitably lead to a long correction period for the industry, and in addition to a series of debt crises faced by real estate developers, it will also have a direct or indirect impact on the macro economy.

Of course, Wells Fargo, as one of the largest banks in the United States, at least gives a reliable conclusion that surpasses the total size of the US economy.

Wells Fargo economists believe that geopolitical tensions have led to the de-risking of supply chains, and while the era of double-digit growth is over, the mainland's nominal real GDP will still grow at a higher rate than the U.S. economy and will overtake the U.S. as the world's largest economy at some point in the future.

This isn't the first time Wells Fargo has predicted.

As early as the beginning of 2022, Wells Fargo released a report predicting that the mainland will surpass the United States to become the world's largest economy in 2032, a forecast ten years earlier than the latest forecast.

But in this latest forecast, Wells Fargo argues that structural shortcomings in the mainland economy are dragging down and stagnating economic growth more than economists had originally predicted, so it is postponed to 2042.

Wells Fargo said the delay was a full decade mainly because China's economy was performing less than expected today, worse than the bank's original pessimistic forecast.

These factors, including the sluggish post-epidemic economic recovery, the sharp depreciation of the RMB exchange rate, the Russia-Ukraine conflict and the Israeli-Kazakhstan conflict, and the worsening of structural imbalances, have exceeded the original estimates.

Objectively speaking, there are certainly challenges facing the mainland economy, but they are definitely not as exaggerated as Wells Fargo said, and more importantly, compared with the US economy, the mainland economy is more resilient, and there is more room for adjustment.

Experience has confirmed more than once that the world pattern is undergoing earth-shaking changes, and the rise in the east and the decline in the west is only the beginning, not the end.

When the mainland's total economic output surpasses that of the United States, then the world's largest economy will be China, not the United States, and the mainland's international influence will be greatly enhanced, and its comprehensive national strength will inevitably rise to a higher level.

Conversely, the divisions and inflationary pressures within the United States will most likely end up being a mess.

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Author: Luo sir, the workplace reference of the new youth. Concerned about the logic behind the development of things, optimistic pessimists. Follow me and grind the knowledge to you.