Cold fact: By 2025, the absolute digital gap between China and the United States in GDP will reach the largest in history, and the GDP share will have dropped from the peak of 75% in 2021 to about 64%. However, this GDP no longer has any meaningful comparison. Setting aside exchange rates, just looking at inflation makes it clear. From 2021 to 2025, US inflation accumulated 25.4%, and US GDP is calculated using the expenditure approach based on final consumption. Even if the real GDP remains zero over these five years, GDP growth would not be less than 25%, but what’s the point? China calculates GDP from the production approach based on value added (output minus intermediate inputs).
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Cold fact: By 2025, the absolute digital gap between China and the United States in GDP will reach the largest in history, and the GDP share will have dropped from the peak of 75% in 2021 to about 64%. However, this GDP no longer has any meaningful comparison. Setting aside exchange rates, just looking at inflation makes it clear. From 2021 to 2025, US inflation accumulated 25.4%, and US GDP is calculated using the expenditure approach based on final consumption. Even if the real GDP remains zero over these five years, GDP growth would not be less than 25%, but what’s the point? China calculates GDP from the production approach based on value added (output minus intermediate inputs).