For the first time since 1976, the 2022 US GDP is projected to grow at a faster rate compared to China’s GDP. According to Bloomberg Report, the US GDP is expected to grow at a rate of 2.8% for 2022 while China’s falls behind at 2%.
Why is China’s economic growth underperforming the GDP growth rate of the US?
Such strides by the US economy have not been made since 1976 when China was growing out from the challenging years of the Cultural Revolution.
Both China and the US have dealt with their fair share of economic problems due to the COVID-19 pandemic. In response, China has enacted new monetary and fiscal policies to the economy but they struggle to bounce back due to President Xi Jinping’s strict Covid Zero policy, which rigorously limits activity when outbreaks occur. On the other hand, the US has been more successful in jump-starting the economy through increases in employment and spending, despite high interest rates.