The U.S. and Chinese economies are headed in two different directions, expert Eswar Prasad said.

The possibility that China will overtake the United States as the world’s biggest economy is declining as the country faces an obvious slowdown, according to Cornell professor and former International Monetary Fund (IMF) official Eswar Prasad.

In a recent interview with Nikkei, Prasad said that the economies of the two countries—currently the first and second biggest economies in the world—have taken opposite trajectories, with the U.S. likely to maintain its growth while China continues to face structural problems like high public debt and a low birth rate.

“China faces a variety of fragilities, including undesirable demographics, a collapsing real estate market, deteriorating investor sentiment at home and abroad, and the lack of clarity over a new growth model,” Prasad said.

“Even a 4 to 5 percent growth rate will be difficult to sustain over the next few years. The likelihood of the prediction that China’s GDP will one day overtake that of the U.S. is declining.” Newsweek contacted Prasad for comment by email on Monday.

    • circuscritic@lemmy.ca
      121·
      9 months ago

      The bigger problem for their economy is their aging population, well, that’s a problem in most developed countries, but China is going to be hit particularly hard due to the lingering effects of old policies. But that’s a macro economic problem for the medium to long term.

      In the near term they’ve exposed their economy to the same shithead neo-liberal speculation driven private profits, public loses, as the West has. Sure, it has a China specific spin to it, but similar enough to cause a real bad time.

      All the economic data I’ve seen shows that their economy is going to shit the bed, hard. This is due to a mixture of bogus economic data coming home, real estate market shitfuckery, and the trade war/tech sanctions.

      The bigger question is how much exposure the shitheads in New York, London, and Tokyo, have and how much it will spillover into the global economy at large.

      The ONLY upside here, is that at least China will execute some of the chuckledicks responsible. You know, instead of give them bonuses and jobs in the next US Presidential administration.