China's economy in steepest decline for 50 years: 'Superpower status is reversing!'
China's share of the global economy is declining and the turn could 'reorder the world', according to an investor
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China's share of the global economy is declining and the turn could "reorder the world", according to an investor.
Ruchir Sharma said the country's decades-long run of growth has come to an end as its share of world GDP is set to shrink by 1.4 per cent over two years.
In nominal dollar terms, which Sharma argues is the most accurate measure of an economy's relative strength, China's share began decreasing in 2022 following a spate of strict Covid measures.
The Rockefeller International chairman explained that China's share is expected to fall further in 2023 - topping 17 per cent.
The drop puts China on track to decline by 1.4 per cent by 2025, a reduction not seen since the 1960s and 1970s, when Mao Zedong presided over a weak economy
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The drop puts China on track to decline by 1.4 per cent by 2025, a reduction not seen since the 1960s and 1970s, when Mao Zedong presided over a weak economy.
It wasn't until the 1970s that the economy began to turn around, following a new leadership.
A rapid increase was seen between 1990 and 2021, when the global economy soared from less than 2 per cent to 18.4 per cent.
However, China will account for none of the growth of global GDP over the past two years.
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"China's decline could reorder the world," Sharma told the Financial Times.
"Since the 1990s, the country's share of global GDP grew mainly at the expense of Europe and Japan, which have seen their shares hold more or less steady over the past two years.
"The gap left by China has been filled mainly by the US and by other emerging nations."
Beijing has maintained a five per cent annual growth target and expects to meet it this year, with the forecast supported by the International Monetary Fund, which sees 5.4 per cent growth for 2023.
China economy on the brink as Beijing takes frantic action to avoid chaosSharma has rejected the use of real GDP growth as a metric as Chinese authorities could tweak the numbers to fit their outlook and cover up the possibility of a decline.
He added: "In a historic turn, China's rise as an economic superpower is reversing. The biggest global story of the past half century may be over.
"But almost no matter what Xi does, his nation's share in the global economy is likely to decline for the foreseeable future. It's a post-China world now."