6 Reasons Why China Will Overtake the USA Economically

According to some experts, China will overtake the United States as the world’s largest economy within a decade, but how?

For years, the United States has been considered the world’s economic superpower. But that title is now being challenged by China, whose economy is rapidly catching up to that of the United States with these 6 competitive economic activities you have to keep an eye on.

1. A Government Driven Economy

The Chinese government is deeply committed to continued economic growth, and has made it a priority to invest in infrastructure and provide financial support to businesses.

Additionally, policymakers have been pursuing reforms to make it easier for businesses to operate in China.

2. Becoming Highly Innovative Country

China is quickly becoming a global center for innovation. In 2017, Chinese companies filed 548,000 patents, more than any other country except for the United States which filed 580,000 patents.

Moreover, many of those patents are for cutting-edge technologies like artificial intelligence and 5G telecommunications.

3. Attracting More and More Investor

The country has a rapidly growing middle class with more disposable income than ever before.

This combination of factors has made China an attractive destination for foreign investment.

In fact, foreign direct investment into China totaled $135 billion in 2017, an increase of 7% from the previous year.

4. Consistent Economic Growth

China has been experiencing consistent economic growth for four decades now. In contrast, the United States has only experienced two periods of sustained economic growth in the past 40 years, which are the 1980s and 1990s.

Another key driver of China’s economic growth is exports. The country exports a wide variety of goods, from electronics to clothing to furniture.

In 2017, China’s exports totaled $2.26 trillion, making it the world’s largest exporter. The United States, by comparison, exported $1.58 trillion worth of goods in 2017.

5. A Massive Population

China has a population of almost 1.4 billion people and that is four times the population of the United States.

More than 60% of China’s population is of working age, compared to just 56% in the United States. And today, China’s workforces are young and well-educated!

More people mean more consumers and more workers, which translates into more economic activity.

6. Very Cheap Labor

China also benefits from a low cost of labor. According to the OECD, labor costs in China are about one-fifth of what they are in the United States.

This gives Chinese businesses a significant competitive advantage when it comes to manufacturing goods for export.


China seems on track to overtake the United States as the world’s largest economy within a decade. So what does that mean for businesses?

It means it’s time to start paying attention to what’s happening in China and how it will impact your business.

Are you prepared for a future in which China is the dominant economic superpower?