Strengthening the Global Importance of China’s Economy in the Post-Pandemic Period

Nikolić, Goran and Zvezdanović Lobanova, Jelena (2022) Strengthening the Global Importance of China’s Economy in the Post-Pandemic Period. Kultura polisa, 19 (3). pp. 44-75. ISSN 1820-4589 eISSN 2812-9466

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Abstract

Despite a pandemic that has brought most of the global economy to its knees, Chinese economic growth continued in 2020 and strongly accelerated in 2021. An almost certain scenario in which China is becoming the leading world economy already brings strong geopolitical implications, primarily in the form of shaking the existing world order, which is practically managed by Washington. The key reason for the strong growth of China’s economy is the high share of both savings and investments in GDP (over two-fifths each) in a very long period, together with its impressive technological progress. In this regard, the direct reason for the current tension between the two countries is China’s economic transformation towards the upper end of global industrial value chains. Attempts to end China’s economic expansion through forced technological unbundling, US trade sanctions, or forced changes in global supply chains, seem doomed to failure given its vast internal market and conquest of entire product ranges or supply chains. America will continue with its efforts to maintain primacy over China in the basic technologies of the future, from artificial intelligence to quantum computing, with the help of huge investments in science. Although the US and China are not necessarily on the path of confrontation, this certainly cannot be ruled out. The aim of this paper is to project the future of the American and Chinese economies' dynamics of GDPs. The applied methodology is based on a linear projection of the GDP growth of both countries in the period after 2026.

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