"Overtaking the U.S.? China Could Stay No. 2 in the Eternal World Economy"

Bloomberg, an economic media outlet, predicted on the 12th (local time) that China's economy may not be able to catch up with the US for ever.

If China's past growth is maintained, it will be a matter of time for a reverse transition, but it is not easy to get out of the 'second-ranked' position in view of recent problems such as excessive debt, a decrease in the economically active population due to an aging population, and international isolation.

Bloomberg Economics analyzed the long-term outlook for China's economy as a 'basic scenario', 'low growth', and 'financial crisis' by varying various variables.

First, in the 'basic scenario' that follows the current growth trend, I saw that China could overtake the United States by the early 2030s.

China's huge R&D investment is expected to shine.

However, Bloomberg has highlighted the possibility of a worst-case 'financial crisis' scenario becoming a reality, citing debt surges since 2008 could hold it back.

Japan, which once aimed to become the world's largest economy, also fell into a liquidity trap due to excessive debt and its growth was dampened.

Some advanced economies, such as the United States, also have high debt ratios, but the situation is different from China, which can fall into the middle-income trap as these countries have already secured income levels above that, Bloomberg said.

As well as defaulting Hungda, other property developers with high leverage ratios (debt dependence) also have weaknesses in their foundations, Bloomberg added.

Eventually, if a financial crisis occurs and China falls into a swamp of low growth, it is predicted that it will be difficult to catch up with the size of the US economy even after a long time.

Even without the extreme assumption of a financial crisis, there are many factors that are impeding China's growth, Bloomberg added.

Finally, Bloomberg predicts that in a 'low-growth' scenario, international isolation and declining working-age populations could hamper China's growth.

In fact, although the one-child policy has been abolished in China, the economically active population, currently 935 million, is expected to decrease to 600-700 million by 2050.