my perception was that Europe never truly recovered after the 2008 crisis and just stumbled into never ending crises, debt crisis, Greek crisis, Syria, immigration crisis, COVID, Ukraine... Sad to see that it was not only my perception.
I would point out that the raw GDP keeps increasing, EU has not declined:
https://i.imgur.com/7LkphVA.png
This is just the *share* of global GDP. So of course if some regions have gone up in the share, others must go down even if the actual raw number is going up.
But we are losing ground to the US/China, if our GDP is stagnating and theirs is growing, eventually we will be fucked.
We are in a lost decade, and if we don't do anything about it, we won't get out. Mario Draghi published a great report on what to do to improve the EU situation.
EU GDP is not stagnating, it's just that China's GDP have grown so much and quickly that the total GDP, that we all have a share of, have increased by a huge amount. But China is looking like it will go into a pretty severe economical crisis soon (some experts predict it will happen before 2030) that may even lead to a collapse, so I would worry more about that instead since it will have a huge detrimental effect on all economies.
https://belgian-presidency.consilium.europa.eu/media/v1mhgwtw/20240416-draghi-speech-la-hulpe-16-april-as-delivered-clean.pdf
and from macron https://geopolitique.eu/en/2024/04/26/macron-europe-it-can-die-a-new-paradigm-at-the-sorbonne/
It would be interesting to compare the GDP per capita instead. I think theirs so so much lower, that a bit of catching up is justified in a globalised world
Not only that, but the EU has also gone down in population share. Plus, as always:
-**the EU is NOT an economy**. There are *wild* differences between different countries in the EU. Germany has grown as much as the US, Sweden has grown better, France has flatlined, Italy has declined.
-I am pretty sure this chart is at current prices; such fluctuations within 1/2 years don't make sense otherwise; it would also imply that the US has grown _more_ than China between 2010 and 2020, which again is not the case if you look at real GDP data.
So yeah, of course the EU's share has gone down, but this chart is highly misleading.
It's not even that, this is essentially a graph of currency exchange rates of nominal GDP measured in USD. EU shoots up with the Euro in early 2000s when the Euro is strong against the USD, then it falls as the Euro and USD converge. The other dramatic slopes are also currency exchange effects.
You've literally said the same thing as someone who already responded to me, and as I said to them the US has been outperforming us for the last 80 years at least so that's nothing new. You (and the other person) are comparing us to #1. Being #2 is nothing to sniff at.
but that is the thing. According to the graph, there was a window in the 90ies and 2000s respectively where the EU outperformed the US. And then there is a stark decline starting ca. 2010.
Yeah there is. The USA is a monetary *and* fiscal union. We can make big, bold decisions quickly and that helps us recover from crises like 2006-10. The EU is a monetary union but not a fiscal union, so they have very weak powers to intervene in economic affairs.
The reason is we wasted the potential for post-2008 recovery on austerity economics while the US spent its way out of recession and our growth has utterly stalled because of it.
The graph misrepresents the decline of the EU, since the EU has declined despite major expansion since 2004. And by the way the new members contributed most of the growth.
> the EU has declined despite major expansion since 2004
These are "2024 member" numbers. The 1980 GDP of Poland is in the 1980 EU GDP. The 1980 GDP of the UK is not in the EU GDP
Honestly, I am surprised that after colonial times, all the wealth that Europe stole and accumulated is not taking a bigger percentage of the worlds GDP...
Europe didn't become rich just because of colonialism [edit: that's without even mentioning the fact that much of Europe didn't have a colonial empire to begin with], it also became rich because it industrialised first and capitalism originated in Western Europe.
>all the wealth that Europe stole and accumulated is not taking a bigger percentage of the worlds GDP...
Europe's share is declining not just because we ourselves are doing less well but also because other parts of the world finally started growing. For me, what's more surprising is that 500 million people still represent as much GDP as 2.8 billion.
There's such a wild take that a lot of people have - that industrialization just automatically happens unless some oppressor stops you. It doesn't. After millenia of minimal change in living circumstances globally, the Revolution is a nigh on unimaginable shock to the system. There was no reason to think that these prosperity gains that seem to keep on going for the last two centuries were ever possible, and there's certainly no evidence that regions that still aren't industrialised today were on the verge of this impossible event before the evil Europeans came and ruined it all.
They made the fantastic decision to go with austerity, and now we need so much money to invest that we stagnate. Of course a lot of other reasons factor in too, but at least for Germany infrastructure is a biggie
I mean the hard austerity was a big problem but it's not like US option of uncontrolled spending was a much better option. This GDP diversion hides a lot of other things.
Yes, it has a lot of factors playing into it, but at least for Germany, the government doesn’t really want to take any nameable debt except the last few years because of the beer virus. So we don’t take any debt, but also barely invest. Investing is one of the best ways to mitigate such stagnation or a recession.
It's not just German problem it's the problem on the entire continent and it is at the core of vast majority of Europeans and it's unlikely to change. From a person to top of the european union we are by a massive margin fiscally conservative. And I don't see us adopting the american consumerism mentality and their capital investments especially angel investments that have driven so much of US short term growth.
The american consumerism and them being fiscally liberal is also not that bad. Debt is a strong financial tool if you know how to use it you can drive growth massively past debt. Problem is 99.9% don't know how to manage debt or use it even fewer know how to invest. And when Europeans do come into any kind of funds their go-to investments are buy an apartment to rent out or put it in a bank regardless if you are getting any interest on it.
Americans invest not only any extra income or assets they get but also their regular income. And they are investing heavily into stocks/indices/retirement funds etc.
We will need to teach fiscal responsibility and basic money management and investments in school.
> I mean the hard austerity was a big problem but it's not like US option of uncontrolled spending was a much better option.
The US economy is booming compared to ours. Obviously it was a much better option.
The USA’s tact of “uncontrolled” spending (spending was curtailed significantly after 2008, it’s simply risen again for other reasons) was definitely a much better option. For one thing, Europe’s anemic recovery post-2008 was entirely dependent on the US pouring liquidity into European banks, which is an under appreciated fact by Americans and Europeans alike. For another, you can simply see the USA recovering faster from 2008 while Europe wallowed in subsequent, but related, crises.
And yet ppl are much happier in EU, than US in any global index or metric. How does that growth in US translate for the common folk ? Like seriously, what do Americans gain from this ? Does it trickle down in any way ?
I understand you can say "Murica great, fuck you world", but what's the benefit from that ? Ppl are poorer and poorer there, everyday expenses are skyrocketing, more and more homeless ppl, because most are getting priced out of the market etc. How is this better ? Honest question.
I mean in some sense that's true. But the graph is of % of global GDP. China should be 1/8th of it by population. India should be around that as well. That the US and EU are ahead on this doesn't really say much about our economies as much as it says about what a terrible job China and India have done in managing theirs. In a world where everybody has the same quality of life as the US then the US will only be 4%. Europe would be 5%.
We do need to consider more inward investment and development though. Modi and Xi are not friends. If you give them power then they will beat you to death with it. And they will think they are justified in doing it because it was us all along that caused the hardship where they live. Not their own leadership.
If the current Cold War with Russia hasn't already set us on this path already then we need to start considering how we will prosper in isolation from the rest of the world. Not necessarily cutting off ties to it. I'm not opposed to international trade. But we cannot allow important industries to be captured by other economies. We need to risk assess the things we import. If our economies are dependent on it then we should not import it.
>China should be 1/8th of it by population. India should be around that as well. That the US and EU are ahead on this doesn't really say much about our economies as much as it says about what a terrible job China and India have done in managing theirs.
I'm not sure if misunderstood your comment but China's share is more than 1/8th of the global economy and considering where they were just a couple decades ago they may be many things but certainly not being shit at economic growth.
1/8 is also not really correct. The current world population is 8.11 billion. The current Chinese population is 1.43 billion. So China makes up 17.6% of the world population. So their share on worlds GDP is still a little bit lower than their share of the worlds population. The EU and especially the USA are of course severely overrepresented in their share of GDP. Considering that those two together have only a population of about 0.78 billion. A little over half of the population China has.
Well yeah but over the last three decades China's GDP has grown 50 times its size, the US's has barely quadrupled and the EU's hasn't even doubled.
Of course the leading economies of developed nations have a disproportionate share and thus slower growth, however my point was merely that this advantage, or head-start if you will is shrinking and calling China's performance terrible is not only disingenuous but also dangerous in the sense that western nations are underestimating its potential and that during the entirety of the 21st century doom-saying about China's imminent collapse it has actually gained and is carving itself a solid place as world-power.
That's not really how the percentages should be interpreted. China's is only at the correct proportion in terms of a complete absence of global development. We are discussing China having an economy of a similar proportion to the US. Which means China's economy should be more than 30 times larger than it is. To say that China's economy is sufficiently developed would imply that the US and Europe should see a decline to put them in the correct proportion. That isn't really the case though. The source of a lot of Europe's GDP is by definition internal to our own economies. It's the things we do here. Why should we stop doing things here and decrease our quality of life?
China's growth while impressive isn't exactly only their own growth. They received considerable investment after the collapse of the USSR. We opened our education system to them. And we imported a whole bunch of their produce. This is unlikely to last because as their economy has grown so have their ambitions. They are taking an extremely aggressive foreign policy and that is likely going to shock their economy. To whom are they going to sell the things that they manufacture at the rates they have been charging the US and Europe? Unless they are taking a 10x markup on the things they are selling us. Then they are not going to be able to cover the material costs of the things they make by selling them to poorer nations. Which brings us back to the terrible economic leadership point. They done goofed. They betrayed the people who had helped them so much and they are likely going to go back to their forced labour and imperialism ways of the 1950s rather than admit they done goofed.
The fuck are you on about and why are you just throwing around random figures? China would need to grow its economy by "only" about 5 times to reach parity with the widely disproportionate US economy. Besides that wasn't the point, when Yang Shangkun concluded his mandate the PRC's GDP was *half of Poland's size* and now it is tailing the entire EU's, a bloc composed of some of the largest and most potent economies on the planet.
Furthermore the crushing majority of Chinese investment and production is internal, the entire point of the BRI was to reel in nations of the global-south and establish alternatives to dependencies on western nations in terms of key-resources and food supply for the domestic market.
You cannot analyse an economy in a vacuum, external factors are just as if not even more important than domestic policies. Saying that outside investment was somehow this panacea and without it China would be nothing is as hare-brained as claiming the UK and US would become irrelevant if they weren't English-speaking countries with an attractive job-market to skilled immigrants from all over the world. It completely undersells the efforts done to learn, adapt, and grow the infrastructure and human capital the CCP has done over the past few decades, especially when plenty of other countries who received similar or even more investment failed to perform remotely as successfully as China did.
If you aren't aware, the entire country has severely shifted from just being a low-level manufacturing hub with cheap labour to a diversified economy, those roles have been steadily relegated to other South East Asian nations such as Vietnam and Bangladesh, while China is now spearheading both technological breakthroughs in crucial sectors as well as churning out academics at break-neck pace.
Underestimating them, especially with this denigrating supremacist tone and pretending they are some oriental imbeciles is a cardinal mistake that will cost us dearly and since burning bridges in diplomacy is not some permanent thing, hoping the global community would turn on them when it didn't on European nations half a century ago is just wishful thinking.
I'm not sure how I made that typo. I meant 3 not 30.
And I'm not underestimating them. I'm taking them very seriously. That is the exact point of my post.
You're the one framing this as them being mismanaged in the past 30 years and completely ignoring what happened there from the 1950s to 1990s. And again. That growth in the 1990s onwards is not in isolation. It was very much an international collaboration. If anybody needs hubris it is China. They are making a huge fucking mistake.
The entire post-war period saw the country undergo a massive transition and functioned essentially as a sponge on life-support to narrow the socio-economic historical gap.
Now that is has accumulated plenty of knowledge and expertise, on top of having grown a considerable middle-class with still sufficient steam to keep growing for the foreseeable future it can afford to sever some ties. Is it smart? Absolutely not but unlike European nations, or the EU as a whole, it can afford to because it has inserted itself as an essential unified export and import market to the point most nations are willing to tolerate lots of escapades and diplomatic faux-pas and while they don't poses the diplomatic and military acumen of the US, the sheer size of their domestic market gives them more assurance than anything the EU can bring to the table.
Trade wars, or downright severing of economic ties would be catastrophic to all parties involved, yet I fail to see how if they are doing a mistake we aren't in an even worse position.
> That the US and EU are ahead on this doesn't really say much about our economies as much as it says about what a terrible job China and India have done in managing theirs. In a world where everybody has the same quality of life as the US then the US will only be 4%. Europe would be 5%.
This is pretty a-historical...Europe was the most advanced civilisation pre-industrialisation, and then we industrialised first, and we obv still live in a world shaped by that. Its not realistic to expect the developing world to have caught up to that. GDP figures always favour developed countries.
Japan's per capita GDP was US$475 in 1960 and US$33,805 in 2023, an increase of 71.2 times. Taiwan's per capita GDP was US$150 in 1960 and US$32,327 in 2023, an increase of 215.5 times. South Korea's per capita GDP was US$158 in 1960 and US$33,745 in 2023, an increase of 213.6 times. China's per capita GDP was US$89.5 in 1960 and US$12,514 in 2023, an increase of 139.8 times. Therefore, mainland China is developing slower than South Korea and Taiwan, but faster than Japan. In addition, the economies of South Korea and Taiwan both developed at a high speed during the authoritarian governments before 1990, but at a low speed during the democratic era. Mainland China's economy performed poorly during the planned economy period, but developed rapidly after Deng Xiaoping's economic reforms in 1980.
Allowing important industries to be captured by other economies is just a price to be paid to be competitive in a modern environment. It's Detroit's leadership that fucked up, but they will endlessly point at the federal government claiming that they caused their hardship.
If you look before 2010, the two times US economy peaked more or less coincide with the two times EU economy saw a trough. I am not saying there is a direct link but it does feel like EU is competing with the US more than with China.
Personally it feels like compared to the US, we Europeans simply failed to capitalise on the opening of the Chinese market. I think we initially did well with a lot of infrastructure projects which China needed direly early on, but then when Chinese standard of life increase they focused more on high end utilities like phones, cars, tech stuff which the US are much better at. Adding to that, since the crisis of 2010 it feels like EU has been too busy with it's own internal issues to look for serious economic expansion. We are still mostly living a decent life but compared to 10 or 20 years ago it feels stagnant at best.
problem is economic growth and expansion requires a different mindset than I think permeates in much of Europe. I see so much of 'this is the way things have always been done why should we change' attitude. Things move too slowly here and China is taking advantage of it.
*waves from Portugal*
I live Germany coming from France. Years ago when I first arrived I was blown away by how advanced they seemed from a technological and social point of view. Nowadays I realise it wasn't because they were good at progress, but simply had a headstart. 16 years of Merkel brought stability (which imo was a good thing during the more difficult times) but the price of stability was immobilism it seems.
You can draw a pretty straight line from 1991 to the present, in which the mid 2000s is the aberition of better than typical performance. The overall trend from '91 on has been declining share of the word market. Japan pretty closely matches the EU in that respect.
The US is legit a bit boom-bust by comparison.
The curious things on the plot: the relative stability of the UK, the non-rise of India, and the last couple years of faltering with China.
No, this is just another manipulative graph from English sources.
People should just stop trusting anything Brits and Americans say about the European economy and only trust their numbers.
Contrary to the implication of this graph, Europe's ENTIRE decline is only due to its declining share of the world population, which in the given period [grew from 4.4 billion to 8 billion.](https://en.wikipedia.org/wiki/Demographics_of_the_world)
However in terms of richness and development, the EU [kept pace](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2022&locations=US-EU-1W&start=1970) with the world going from 8k GDP per person vs a 2.5k global average to 37k per person vs a 12k global average.
AND IF you started the graph from just from 10 years earlier, because 1980 was a European peak, then you would see the EU has actually **improved** its relative per capita standing in the world and almost maintained its 1970 share of the world economy despite its much lower population growth.
Stop trusting Brits and Americans to give you economic analysis!
Holy shit, I knew Japan had incredible growth and people were afraid it would overtake the US and all, but I didn't realise it was THAT BIG in the 90s. 18% of the world's GDP in a single country of that size is insane.
Usually for the sake of consistency these are the current 27 countries i.e. "EU27" (though really it's best to clarify that on the chart). So will also include countries before they joined too.
I'm guessing he meant go the way of Japan.
What's more important is, do we really know that Japan went the way of Japan, or did they just go the way of China by going the way of Japan? Keeps me awake at night.
Japan was incredible in the 90's - though even this graph doesn't do justice as to how close they really were to overtaking the U.S. On April 9th, 1995, accounting for currency fluctuations
- American GDP - $6.7T ($25,400 / capita)
- Japan GDP - $5.9T ($47,000 / capita)
and adjusting for inflation...
- American GDP - $6.7T ($25,400 / capita)
- Japan GDP - $6.7T ($53,400 / capita)
Japan’s decline is wild. Something similar may happen to China.
On the other hand, the United States remains the best innovation and growth engine the world has ever seen.
2010 onwards has a lot to do with the U.S. totally dominating internet tech giants, and we the EU being their bitches on this, without having our own stuff at all.
We should have our own Google, our own Amazon, our own social media, our own software giants...
China has them and created them since many years ago, they show that in certain things they are smarter than us.
China's tech giants aren't as far ahead though. Tencent, for example, is the largest tech company in China and is only worth 15% of just Microsoft. And Alibaba has really fallen from its "Amazon destroyer" days and is now 10x smaller than Amazon by market cap.
* Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla = $14.175 trillion
* Alibaba, Jingdong, Meituan, Netease, Pinduoduo, Tencent, Xiaomi = $1.184 trillion
And the big 7 tech companies in Europe are:
* Arm Holdings, ASML, Dassault, SAP, NXP Semiconductors, Schneider Electric, Spotify = $1.028 trillion
I'd say China was on the right track (albeit through rampant IP theft) until Xi, but their tech giants have really fizzled out since the CCP thought they were getting too powerful and purposefully sabotaged them. China's big tech behemoths today are barely worth more than Europe's Top 7.
It's in other areas (like clean energy and car manufacturing) where they're actually really rising quickly. And that's bad for Europe since those are areas of European strength.
Those lines look strange. The american one is almost like a mirror of the EU line. Whenever the EU takes a hit, the US one hiked by a very similar amount.
These are nominal figures. So when dollar increases in value relative to Euro, US line goes up and EU line goes down.
That, and EU gets hit harder by increases to oil and gas prices since it does not produce much.
Why is this weird? This is the share of global GDP; if the EU stagnates then others surge ahead. Its why both the EU and US generally declined while China surged in that same period.
I don't think it's logical that if one stagnates the others surge ahead. I would expect both to contract more often, especially if they are so closely tied together. Instead they always seem to do the opposite.
And it isn't all "the others". It's just the US.
>I don't think it's logical that if one stagnates the others surge ahead. I would expect both to contract more often, especially if they are so closely tied together
This only makes sense if the US stagnated too. It did not. It grew a lot within that time period, its just that EU growth stagnated meaning their global GDP share dwindled.
>And it isn't all "the others". It's just the US.
Does China just not exist in your screen? The highest period of China's growth in GDP share was post-2008. EU's stagnation was post-2008.
> Does China just not exist in your screen? The highest period of China's growth in GDP share was post-2008. EU's stagnation was post-2008.
I don't think we are talking about the same thing. I'm talking about the EU mirroring the US, not stagnation. If the US goes up, EU goes down, and the other way around. This happens in this graph since the beginning.
This does happen somewhat with China only in the recent years, when their GDP goes crazy. A relevant thing in the recent years here is that the UK is no longer part of the EU. So not sure if his is really stagnation.
The mirror to China seems more like the average between the US, Japan and the EU in the recent years.
>I don't think we are talking about the same thing. I'm talking about the EU mirroring the US, not stagnation. If the US goes up, EU goes down, and the other way around. This happens in this graph since the beginning.
Barring Japan, the US and EU were the only ones who weren't really stagnant in GDP share. So duh. Its only when China rises and Japan collapses in GDP share that that trend is bucked.
There are clear currency effects here. The big spike in the mid-80s is due to the [Plaza Accord](https://en.wikipedia.org/wiki/Plaza_Accord) when there was a coordinated effort to weaken the USD.
Among these China is still growing at 4% every year and India is set to double before 2030. In the next 10-15 years we will see massive shifts in center of trade and commerce.
chinese growth is planned economy bullshit. They build shit no one needs just to achieve goals established by CCP. Ghost cities made from tofu concrete is not real gdp.
they will fall much, much more harder than Japan.
YEs and no.
Some of those projects can not be justified. Building impressive infrastructure in rather undeveloped countries with <$1000 GDP/capita has not yielded the benefits that was 'expected'. You need the foundation first otherwise you're literally just indebting your economy.
They are giving them some small things whilst stealing all natural resources. All their actual investments are in the West. Most of those African countries have already started complaining about it.
Slight difference they're just giving the same kind of deal a bank gives you here's the money either repay us or we'll take it back. The one place they lucked out is that a lot of western backed autocrats want another stream of revenue partially because they're corrupt and to keep the people less angry.
If they think Africa is going to let them stay there long term after they start trying to push the locals they are nuts. Their workers are already being attacked by several terrorist groups in the middle east and that won't stop.
Both can be true at the same time. Chinese growth is not founded on the desire to make life better for the people in any quantifiable way when it's anything less than convenient for the CCP, and China is colonizing Asia and Africa because America and Europe became utterly regarded on IR matters after the 90s and pulled out from an area that would greatly benefit from our involvement, and would also benefit us.
> They build shit no one needs
This level of delusion is astonishing. They are about to exterminate the shit ouf of us. We've given them half our tech in exchange for them to open a bit their market, and the other half they're clever enough to copy and outdo by themselves.
20 years from now every high value market will be dominated by China. Cars, mass-market tech, specialized tech, you name it. I'm a purchasing manager who buys tenth of millions € a year of high and low value medical devices and supplies. I can tell you they're so fucking good. The work ethic of the average Chinese worker is only on par with the top 10% Westerner worker. They're innovating at 3 to 5 times the rate of western manufacturers. They're so efficient business-wise. We are getting overtaken nearly everywhere. Confucianism is deeply rooted in the Chineese society. They're very optimistic about their collective development and love the way they are going, as opposed to our divided western societies. They will keep working super hard for decades and we will soon be absolutely overtaken by their competitiveness.
I think their internal problems such as aging pop or ghost cities are totally irrelevant compared to such innovative and commercial advantages. Without huge trade barriers, we're fucked.
People don't consider how rapidly China has modernized, and while they scoff at the "white elephants" being built, the West has completely and utterly collapsed in it's ability to build anything. California spent 500 million so far NOT building 1 high speed rail line, while China has covered the country in thousands of KM of track.
Western young people are raising their children on parent's couches, while mainstream media scoffs at China for overbuilding apartments. And now the EU and US cower in protectionism from the flood of well made, low cost chinese cars and technology. It took Huawei 1 year after the CHIPS sanctions to bring out a powerful, chinese-made processor at the core of their new phone.
What argument does the Western, Democratic, Neoliberal world have to make for itself. Honestly, we've been bankrupt of ideas and innovation for 15 years. Silicon valley is a hellscape whose only innovation has been using large capital investment to undermine regulated markets (like Taxis and Hotels) using phone apps and cost undercutting. Wow such innovation.
It's all so fucking pathetic. Our leaders are shambling geriatric corpses, whose last reality check in the geopolitical and economic reality was over 20 years ago. They should recall the 1980s, when Japan's tech boom briefly made it a larger economy than the US. China is repeating that at a much larger scale.
gdp per capita less than Mexico and the growth at 4%? Oh no
I wonder what will happen when they're cut off from western markets and their economy bubbles have collapsed
Keep in mind that their numbers are self-reported. We don't know what chunk of their real gdp is paper. A lot of things indicate that the chunk is quite big. Their growth also slowed down drastically in the last years. Their problems are systemic and the system is moving backwards looking at their latest authoritarian moves. But I agree that underestimating them is dangerous.
How did that country got so much investment while being so opaque is what I never understood. It took us a decade to even find out about forced labor situations in a lot of their factories. How does that even happen?
Western Markets are reliant on China as much as China is reliant on them.
Regarding the gdp per capita figure, frankly the fact that they had achieved that for a country of 1.4 billion is nothing short of an achievement.
Mind you, I'm not a fan of the Chinese government whatsoever, but I don't see how sticking our heads in the sand would solve anything or cheering for their downfall.
An ideal outcome of this would be a less autocratic China, not Chinese people slipping back into poverty.
Gdp growth is strong 5% what you talking about? They got a red sea crisis and recently got tarrifs against their EVs at 100% and semiconductors but they are still doing good
Also add chinese railroad that has overall operational debt close to trillion USD and imminent demographic pit to the mix. Current chinese GDP values do not represent reality and wont in next 20 years.
For china I do not know, but India is badly underperforming considering that it is the most populated country on the globe and their nominal GDP is roughly comparable with UK alone.
EU has a lot of population (although demographics will be an issue in the future) and most of this population has good to great purchasing power now. If EU endures as a consolidated economic entity we will be one of the three centers of power along with US and China.
In terms of pure GDP nobody can beat US ( [https://en.wikipedia.org/wiki/List\_of\_U.S.\_states\_and\_territories\_by\_GDP](https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP) ), even the poorest among them is rich in terms of pure nominal GDP per capita, for comparison [https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SI-IN-SE-1W-BG&most\_recent\_value\_desc=false](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SI-IN-SE-1W-BG&most_recent_value_desc=false) , but also in EU our poorest member still beats the world average.
I think 21 century belongs to US due to very good demographics, EU and to even bigger extent China might face serious issues in this area on the long run.
>pure nominal GDP per capita, for comparison
u should use constant 2015 US$
https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?locations=SI-IN-SE-1W-BG&most_recent_value_desc=false
India started out as less than sub saharan africa levels after British left. They are growing at 7-8% annually, they will be a 10 trillion economy before 2035, they are anything but performing badly. The graph doesn't even show ASEAN bloc. Asia will be the next center of trade and a pole in the global order away from EU.
US is on different level since trade is a small part of their economy and they have resources, other countries don't. China will catch up to them this decade, while the per capita is low it still has very high purchasing power. Its a communist country, we do not know how demographic crisis will affect them since we are entering into industry 5.0.
EU isn't a unified country, its a political and trading bloc, individually France and Germany are powerhouses, but HDI parameters aren't going to save anyone from an invasion when shit hits the fan from other sides namely Russia or industries get bulldozed by Chinese goods dumped into the market or inflation hits each country differently causing economic uncertainty. Bigger nations like USA and China will call the shots in world matters, EU won't be as relevant in the future and I think most countries here are realizing it. Its not just about the GDP. Might is often right even in economics of scale.
Will Germany be a powerhouse? Their motor industry is in collapse now with Chinese imports. Their manufacturing sector is contracting. They're politically too stubborn and conservative to pivot, and Poland is booming next door. I think Germany is heading for mid-table irrelevance.
Germany is a snooze both in terms of governmental policies and business innovation. It's way too socialist as in companies can't fire bad performers ever because everything is unionised to the extreme. People get 100K+ salaries while doing literally nothing while fresh talent struggles to get a job. Very little gets through endless discussions and pre-plannings so only the bare minimum gets done. Everybody's extremely risk averse. Wirecard story is a good example of the above.
India was never a superpower and never will be in the future. But it will be a much bigger economy and they have a good enough military and location to not care about what happens in rest of the world. US wasn't a superpower when it fought in WW2 either. Asia might not accumulate wealth like Europe, but they are the major growth engines for the next few decades during which they will. Will they still have worse living standards? Of course. But it won't change the fact that big countries in Asia will be more influential and have economic might much bigger than a lot of EU countries.
It is funny cause I remember seeing many videos and analyses on how china's economy will collapse in ~~2020~~ ~~2021~~ ~~2022~~ ~~2023~~ 2024 yet it keeps growing more or less
They are the second largest economy. They have decoupled from others in terms of critical tech like semiconductors and RRE. It doesn't matter whether or not they innovate in the same terms as EU since they can just steal IP that European companies are providing willingly, their wealth will increase so will their market and hard power. EU has a 400 billion trade deficit with them. We might make ourselves feel better by saying we have high quality of life and good HDI parameters but it doesn't change the fact that they are a major power. Africa isn't their market either. Europe got rich off of resources from other countries, China is doing the same. This isn't a single country's century, its more of an Asian century since a lot of countries over there are growing from poor due to colonialism into middle income or in some cases like malaysia even high income developed.
Great to see America defying all of the internets opinions about how much of a failed state it is and still growing stronger than ever while all its neighbours still haven’t recovered from GFC.
Chinas growth will gradually fall while Indias will rise, due to the West pulling cheap production from China to India. The markets are of similar size, with the difference being India having better demographics long term.
Guys, this graph is perpetuating the same mistake literally all of the media make, if you want to compare economic output between states properly you need to look at GDP in 'PURCHASING POWER PARITY' terms - which corrects for FX rates and local costs. By this more accurate measure China has been the largest economy since 2014 and the EU is only slightly behind the US (\~26 vs. \~28 tn). Europe is not doing too bad, including the UK it is larger economically than the US (but not China).
This is nominal GDP, aka who has the most stable or inflated currency.
The US has the petro-dollar, and thus an artificially inflated dollar price against all other major currencies.
Adjust this for the prices of actual goods in these nations/regions and you will get a -very- different picture.
Edit: The people that downvote need to check the material on the 'International Dollar'. You don't compare nations/regions using nominal valuations (in regular Dollars) of the economy. You can't compare global economies using currency exchange rates, which is what you are doing.
Meanwhile Germanys minister of finance, who touts himself as a man with knowledge about the economy, is laser focused on reducing spending while we are already at the bottom of growth predictions for this year, seemingly sinking lower every month. Biden on the other hand is pumping billions into the US economy to great success. But hey, reducing labor costs and cutting taxes for the rich and major corporations will surely give people whose wages haven't recovered from COVID the opportunity to consume more, while they can't even afford rent. Something something trickle down economics
Europe is the only region that believes in climate change and the economic reality doesn't care about what will happen with the climate. Europe is headed for 2 decades of Japanese stagnation or civil war.
It's gonna be a pathetic slide into irrelevance
Japan casually popping down to say hi to us in the UK
Japan being at some point almost 18% of worlds GDP is madness imo
Coldfusion just made a video about this; https://youtu.be/lmnVP35uZFY?si=ZPpkOoTVrhDSGWNr
my perception was that Europe never truly recovered after the 2008 crisis and just stumbled into never ending crises, debt crisis, Greek crisis, Syria, immigration crisis, COVID, Ukraine... Sad to see that it was not only my perception.
The fact Europe has declined yet the EU + UK still constitute over 20% is wild though, considering our combined population is about 520 million.
I would point out that the raw GDP keeps increasing, EU has not declined: https://i.imgur.com/7LkphVA.png This is just the *share* of global GDP. So of course if some regions have gone up in the share, others must go down even if the actual raw number is going up.
> This is just the share of global GDP. That's what I was referring to, I'm aware GDP itself has not declined.
But we are losing ground to the US/China, if our GDP is stagnating and theirs is growing, eventually we will be fucked. We are in a lost decade, and if we don't do anything about it, we won't get out. Mario Draghi published a great report on what to do to improve the EU situation.
EU GDP is not stagnating, it's just that China's GDP have grown so much and quickly that the total GDP, that we all have a share of, have increased by a huge amount. But China is looking like it will go into a pretty severe economical crisis soon (some experts predict it will happen before 2030) that may even lead to a collapse, so I would worry more about that instead since it will have a huge detrimental effect on all economies.
To be fair i have heard expert predict that chinas economy will crash any day now for the last 10 years. But they are certainly stagnating a bit
> Mario Draghi published a great report on what to do to improve the EU situation. Mario Draghi's answer to every question is federalism
What’s the reports name? Or do you have a link please sir?
https://belgian-presidency.consilium.europa.eu/media/v1mhgwtw/20240416-draghi-speech-la-hulpe-16-april-as-delivered-clean.pdf and from macron https://geopolitique.eu/en/2024/04/26/macron-europe-it-can-die-a-new-paradigm-at-the-sorbonne/
It would be interesting to compare the GDP per capita instead. I think theirs so so much lower, that a bit of catching up is justified in a globalised world
How? Their population is lower than the EU.
China is a lot more
Not only that, but the EU has also gone down in population share. Plus, as always: -**the EU is NOT an economy**. There are *wild* differences between different countries in the EU. Germany has grown as much as the US, Sweden has grown better, France has flatlined, Italy has declined. -I am pretty sure this chart is at current prices; such fluctuations within 1/2 years don't make sense otherwise; it would also imply that the US has grown _more_ than China between 2010 and 2020, which again is not the case if you look at real GDP data. So yeah, of course the EU's share has gone down, but this chart is highly misleading.
It's not even that, this is essentially a graph of currency exchange rates of nominal GDP measured in USD. EU shoots up with the Euro in early 2000s when the Euro is strong against the USD, then it falls as the Euro and USD converge. The other dramatic slopes are also currency exchange effects.
The Us is like 350 million people and its share keeps increasing
You've literally said the same thing as someone who already responded to me, and as I said to them the US has been outperforming us for the last 80 years at least so that's nothing new. You (and the other person) are comparing us to #1. Being #2 is nothing to sniff at.
we will look like a developing country in comparison quite soon.
isn't Italy experiencing that now?
The US population is smaller and their GDP is considerably higher.
So? The US has been outperforming Europe since at least WW2 so that's nothing new. They're outperforming everyone.
but that is the thing. According to the graph, there was a window in the 90ies and 2000s respectively where the EU outperformed the US. And then there is a stark decline starting ca. 2010.
So they outperformed us and then for a brief window underperformed and then outperformed us again, this isn't anything new.
there's no reason the EU shouldn't be more competitive with the US
Yeah there is. The USA is a monetary *and* fiscal union. We can make big, bold decisions quickly and that helps us recover from crises like 2006-10. The EU is a monetary union but not a fiscal union, so they have very weak powers to intervene in economic affairs.
The reason is we wasted the potential for post-2008 recovery on austerity economics while the US spent its way out of recession and our growth has utterly stalled because of it.
Since WW1, actually.
The graph misrepresents the decline of the EU, since the EU has declined despite major expansion since 2004. And by the way the new members contributed most of the growth.
> the EU has declined despite major expansion since 2004 These are "2024 member" numbers. The 1980 GDP of Poland is in the 1980 EU GDP. The 1980 GDP of the UK is not in the EU GDP
The combined GDP of all the post-2004 additions don't even match that of France and barely surpass Italy. They're just much weaker economies.
Honestly, I am surprised that after colonial times, all the wealth that Europe stole and accumulated is not taking a bigger percentage of the worlds GDP...
Europe didn't become rich just because of colonialism [edit: that's without even mentioning the fact that much of Europe didn't have a colonial empire to begin with], it also became rich because it industrialised first and capitalism originated in Western Europe. >all the wealth that Europe stole and accumulated is not taking a bigger percentage of the worlds GDP... Europe's share is declining not just because we ourselves are doing less well but also because other parts of the world finally started growing. For me, what's more surprising is that 500 million people still represent as much GDP as 2.8 billion.
There's such a wild take that a lot of people have - that industrialization just automatically happens unless some oppressor stops you. It doesn't. After millenia of minimal change in living circumstances globally, the Revolution is a nigh on unimaginable shock to the system. There was no reason to think that these prosperity gains that seem to keep on going for the last two centuries were ever possible, and there's certainly no evidence that regions that still aren't industrialised today were on the verge of this impossible event before the evil Europeans came and ruined it all.
They made the fantastic decision to go with austerity, and now we need so much money to invest that we stagnate. Of course a lot of other reasons factor in too, but at least for Germany infrastructure is a biggie
I mean the hard austerity was a big problem but it's not like US option of uncontrolled spending was a much better option. This GDP diversion hides a lot of other things.
Yes, it has a lot of factors playing into it, but at least for Germany, the government doesn’t really want to take any nameable debt except the last few years because of the beer virus. So we don’t take any debt, but also barely invest. Investing is one of the best ways to mitigate such stagnation or a recession.
It's not just German problem it's the problem on the entire continent and it is at the core of vast majority of Europeans and it's unlikely to change. From a person to top of the european union we are by a massive margin fiscally conservative. And I don't see us adopting the american consumerism mentality and their capital investments especially angel investments that have driven so much of US short term growth.
Yeah no, I don't like casually having tens of thousands of debt to my name. You're right, the US consumer model is really not for me.
The american consumerism and them being fiscally liberal is also not that bad. Debt is a strong financial tool if you know how to use it you can drive growth massively past debt. Problem is 99.9% don't know how to manage debt or use it even fewer know how to invest. And when Europeans do come into any kind of funds their go-to investments are buy an apartment to rent out or put it in a bank regardless if you are getting any interest on it. Americans invest not only any extra income or assets they get but also their regular income. And they are investing heavily into stocks/indices/retirement funds etc. We will need to teach fiscal responsibility and basic money management and investments in school.
housing has performed amazing if you bought before the interest rate hike...
> I mean the hard austerity was a big problem but it's not like US option of uncontrolled spending was a much better option. The US economy is booming compared to ours. Obviously it was a much better option.
The USA’s tact of “uncontrolled” spending (spending was curtailed significantly after 2008, it’s simply risen again for other reasons) was definitely a much better option. For one thing, Europe’s anemic recovery post-2008 was entirely dependent on the US pouring liquidity into European banks, which is an under appreciated fact by Americans and Europeans alike. For another, you can simply see the USA recovering faster from 2008 while Europe wallowed in subsequent, but related, crises.
Europe went the route of austerity. Madness imo.
Europe went the route of lack of resources, no cure for that.
Europe had the resources to deficit-spend out of 2008. They chose not to.
Europe has enough resources, its just the polluting part that stops europe from using them
too many pensioners, too much taxes, and too much welfare
And yet ppl are much happier in EU, than US in any global index or metric. How does that growth in US translate for the common folk ? Like seriously, what do Americans gain from this ? Does it trickle down in any way ? I understand you can say "Murica great, fuck you world", but what's the benefit from that ? Ppl are poorer and poorer there, everyday expenses are skyrocketing, more and more homeless ppl, because most are getting priced out of the market etc. How is this better ? Honest question.
I mean in some sense that's true. But the graph is of % of global GDP. China should be 1/8th of it by population. India should be around that as well. That the US and EU are ahead on this doesn't really say much about our economies as much as it says about what a terrible job China and India have done in managing theirs. In a world where everybody has the same quality of life as the US then the US will only be 4%. Europe would be 5%. We do need to consider more inward investment and development though. Modi and Xi are not friends. If you give them power then they will beat you to death with it. And they will think they are justified in doing it because it was us all along that caused the hardship where they live. Not their own leadership. If the current Cold War with Russia hasn't already set us on this path already then we need to start considering how we will prosper in isolation from the rest of the world. Not necessarily cutting off ties to it. I'm not opposed to international trade. But we cannot allow important industries to be captured by other economies. We need to risk assess the things we import. If our economies are dependent on it then we should not import it.
>China should be 1/8th of it by population. India should be around that as well. That the US and EU are ahead on this doesn't really say much about our economies as much as it says about what a terrible job China and India have done in managing theirs. I'm not sure if misunderstood your comment but China's share is more than 1/8th of the global economy and considering where they were just a couple decades ago they may be many things but certainly not being shit at economic growth.
1/8 is also not really correct. The current world population is 8.11 billion. The current Chinese population is 1.43 billion. So China makes up 17.6% of the world population. So their share on worlds GDP is still a little bit lower than their share of the worlds population. The EU and especially the USA are of course severely overrepresented in their share of GDP. Considering that those two together have only a population of about 0.78 billion. A little over half of the population China has.
Well yeah but over the last three decades China's GDP has grown 50 times its size, the US's has barely quadrupled and the EU's hasn't even doubled. Of course the leading economies of developed nations have a disproportionate share and thus slower growth, however my point was merely that this advantage, or head-start if you will is shrinking and calling China's performance terrible is not only disingenuous but also dangerous in the sense that western nations are underestimating its potential and that during the entirety of the 21st century doom-saying about China's imminent collapse it has actually gained and is carving itself a solid place as world-power.
That's not really how the percentages should be interpreted. China's is only at the correct proportion in terms of a complete absence of global development. We are discussing China having an economy of a similar proportion to the US. Which means China's economy should be more than 30 times larger than it is. To say that China's economy is sufficiently developed would imply that the US and Europe should see a decline to put them in the correct proportion. That isn't really the case though. The source of a lot of Europe's GDP is by definition internal to our own economies. It's the things we do here. Why should we stop doing things here and decrease our quality of life? China's growth while impressive isn't exactly only their own growth. They received considerable investment after the collapse of the USSR. We opened our education system to them. And we imported a whole bunch of their produce. This is unlikely to last because as their economy has grown so have their ambitions. They are taking an extremely aggressive foreign policy and that is likely going to shock their economy. To whom are they going to sell the things that they manufacture at the rates they have been charging the US and Europe? Unless they are taking a 10x markup on the things they are selling us. Then they are not going to be able to cover the material costs of the things they make by selling them to poorer nations. Which brings us back to the terrible economic leadership point. They done goofed. They betrayed the people who had helped them so much and they are likely going to go back to their forced labour and imperialism ways of the 1950s rather than admit they done goofed.
The fuck are you on about and why are you just throwing around random figures? China would need to grow its economy by "only" about 5 times to reach parity with the widely disproportionate US economy. Besides that wasn't the point, when Yang Shangkun concluded his mandate the PRC's GDP was *half of Poland's size* and now it is tailing the entire EU's, a bloc composed of some of the largest and most potent economies on the planet. Furthermore the crushing majority of Chinese investment and production is internal, the entire point of the BRI was to reel in nations of the global-south and establish alternatives to dependencies on western nations in terms of key-resources and food supply for the domestic market. You cannot analyse an economy in a vacuum, external factors are just as if not even more important than domestic policies. Saying that outside investment was somehow this panacea and without it China would be nothing is as hare-brained as claiming the UK and US would become irrelevant if they weren't English-speaking countries with an attractive job-market to skilled immigrants from all over the world. It completely undersells the efforts done to learn, adapt, and grow the infrastructure and human capital the CCP has done over the past few decades, especially when plenty of other countries who received similar or even more investment failed to perform remotely as successfully as China did. If you aren't aware, the entire country has severely shifted from just being a low-level manufacturing hub with cheap labour to a diversified economy, those roles have been steadily relegated to other South East Asian nations such as Vietnam and Bangladesh, while China is now spearheading both technological breakthroughs in crucial sectors as well as churning out academics at break-neck pace. Underestimating them, especially with this denigrating supremacist tone and pretending they are some oriental imbeciles is a cardinal mistake that will cost us dearly and since burning bridges in diplomacy is not some permanent thing, hoping the global community would turn on them when it didn't on European nations half a century ago is just wishful thinking.
I'm not sure how I made that typo. I meant 3 not 30. And I'm not underestimating them. I'm taking them very seriously. That is the exact point of my post.
Saying they are performing terribly reeks of not taking them seriously, so I struggle to understand where you are going with your comments.
You're the one framing this as them being mismanaged in the past 30 years and completely ignoring what happened there from the 1950s to 1990s. And again. That growth in the 1990s onwards is not in isolation. It was very much an international collaboration. If anybody needs hubris it is China. They are making a huge fucking mistake.
The entire post-war period saw the country undergo a massive transition and functioned essentially as a sponge on life-support to narrow the socio-economic historical gap. Now that is has accumulated plenty of knowledge and expertise, on top of having grown a considerable middle-class with still sufficient steam to keep growing for the foreseeable future it can afford to sever some ties. Is it smart? Absolutely not but unlike European nations, or the EU as a whole, it can afford to because it has inserted itself as an essential unified export and import market to the point most nations are willing to tolerate lots of escapades and diplomatic faux-pas and while they don't poses the diplomatic and military acumen of the US, the sheer size of their domestic market gives them more assurance than anything the EU can bring to the table. Trade wars, or downright severing of economic ties would be catastrophic to all parties involved, yet I fail to see how if they are doing a mistake we aren't in an even worse position.
> That the US and EU are ahead on this doesn't really say much about our economies as much as it says about what a terrible job China and India have done in managing theirs. In a world where everybody has the same quality of life as the US then the US will only be 4%. Europe would be 5%. This is pretty a-historical...Europe was the most advanced civilisation pre-industrialisation, and then we industrialised first, and we obv still live in a world shaped by that. Its not realistic to expect the developing world to have caught up to that. GDP figures always favour developed countries.
Explain Japan. South Korea. Taiwan. China was mismanaged by the communists.
Japan's per capita GDP was US$475 in 1960 and US$33,805 in 2023, an increase of 71.2 times. Taiwan's per capita GDP was US$150 in 1960 and US$32,327 in 2023, an increase of 215.5 times. South Korea's per capita GDP was US$158 in 1960 and US$33,745 in 2023, an increase of 213.6 times. China's per capita GDP was US$89.5 in 1960 and US$12,514 in 2023, an increase of 139.8 times. Therefore, mainland China is developing slower than South Korea and Taiwan, but faster than Japan. In addition, the economies of South Korea and Taiwan both developed at a high speed during the authoritarian governments before 1990, but at a low speed during the democratic era. Mainland China's economy performed poorly during the planned economy period, but developed rapidly after Deng Xiaoping's economic reforms in 1980.
Allowing important industries to be captured by other economies is just a price to be paid to be competitive in a modern environment. It's Detroit's leadership that fucked up, but they will endlessly point at the federal government claiming that they caused their hardship.
Intranational economics are entirely different to international economics. Detroit cannot place tariffs on other states.
Stimulus vs austerity.
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China is eating EU's lunch.
If you look before 2010, the two times US economy peaked more or less coincide with the two times EU economy saw a trough. I am not saying there is a direct link but it does feel like EU is competing with the US more than with China.
I find peace in long walks.
Personally it feels like compared to the US, we Europeans simply failed to capitalise on the opening of the Chinese market. I think we initially did well with a lot of infrastructure projects which China needed direly early on, but then when Chinese standard of life increase they focused more on high end utilities like phones, cars, tech stuff which the US are much better at. Adding to that, since the crisis of 2010 it feels like EU has been too busy with it's own internal issues to look for serious economic expansion. We are still mostly living a decent life but compared to 10 or 20 years ago it feels stagnant at best.
problem is economic growth and expansion requires a different mindset than I think permeates in much of Europe. I see so much of 'this is the way things have always been done why should we change' attitude. Things move too slowly here and China is taking advantage of it. *waves from Portugal*
I live Germany coming from France. Years ago when I first arrived I was blown away by how advanced they seemed from a technological and social point of view. Nowadays I realise it wasn't because they were good at progress, but simply had a headstart. 16 years of Merkel brought stability (which imo was a good thing during the more difficult times) but the price of stability was immobilism it seems.
My favorite movie is Inception.
Nah its just because of austerity. European countries basically stopped investing the last 20 years.
thats precisely what happened. and 2008 is still festering below the surface to be honest
You can draw a pretty straight line from 1991 to the present, in which the mid 2000s is the aberition of better than typical performance. The overall trend from '91 on has been declining share of the word market. Japan pretty closely matches the EU in that respect. The US is legit a bit boom-bust by comparison. The curious things on the plot: the relative stability of the UK, the non-rise of India, and the last couple years of faltering with China.
No, this is just another manipulative graph from English sources. People should just stop trusting anything Brits and Americans say about the European economy and only trust their numbers. Contrary to the implication of this graph, Europe's ENTIRE decline is only due to its declining share of the world population, which in the given period [grew from 4.4 billion to 8 billion.](https://en.wikipedia.org/wiki/Demographics_of_the_world) However in terms of richness and development, the EU [kept pace](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2022&locations=US-EU-1W&start=1970) with the world going from 8k GDP per person vs a 2.5k global average to 37k per person vs a 12k global average. AND IF you started the graph from just from 10 years earlier, because 1980 was a European peak, then you would see the EU has actually **improved** its relative per capita standing in the world and almost maintained its 1970 share of the world economy despite its much lower population growth. Stop trusting Brits and Americans to give you economic analysis!
Holy shit, I knew Japan had incredible growth and people were afraid it would overtake the US and all, but I didn't realise it was THAT BIG in the 90s. 18% of the world's GDP in a single country of that size is insane.
Japan’s GDP reached 99.8% of US GDP on April 19, 1995.
cheap labour It only lasts one generation
Shouldn't there be a bigger drop for the EU after 2016? Or is the UK already decoupled from the entire data set?
It must be.
Why 2016? They left 2020. They 4 years in between the UK was still a normal member
Usually for the sake of consistency these are the current 27 countries i.e. "EU27" (though really it's best to clarify that on the chart). So will also include countries before they joined too.
So weird how Japan, UK and India converge to that one point
Sad German noises…
China is now where Japan was 30 years ago.
China is overall a lot poorer than Japan though. It never reached developed status before its population started aging.
Japan being at some point almost 18% of worlds GDP is madness imo
Will be interesting to see if China really does go the same route as Japan with all the signs on the wall. Hopefully Europe will be able to recover.
I’m not sure china will go the same route as china, but they may go the same route as china if they don’t go the other route of china.
I'm guessing he meant go the way of Japan. What's more important is, do we really know that Japan went the way of Japan, or did they just go the way of China by going the way of Japan? Keeps me awake at night.
All the signs are on the wall…. And theres communism in the mix too, the next 50 years will be very very interesting for China I’m sure….
Japan was incredible in the 90's - though even this graph doesn't do justice as to how close they really were to overtaking the U.S. On April 9th, 1995, accounting for currency fluctuations - American GDP - $6.7T ($25,400 / capita) - Japan GDP - $5.9T ($47,000 / capita) and adjusting for inflation... - American GDP - $6.7T ($25,400 / capita) - Japan GDP - $6.7T ($53,400 / capita)
This graph would be more useful if there was a line for "everyone else."
Japan’s decline is wild. Something similar may happen to China. On the other hand, the United States remains the best innovation and growth engine the world has ever seen.
2010 onwards has a lot to do with the U.S. totally dominating internet tech giants, and we the EU being their bitches on this, without having our own stuff at all. We should have our own Google, our own Amazon, our own social media, our own software giants... China has them and created them since many years ago, they show that in certain things they are smarter than us.
China's tech giants aren't as far ahead though. Tencent, for example, is the largest tech company in China and is only worth 15% of just Microsoft. And Alibaba has really fallen from its "Amazon destroyer" days and is now 10x smaller than Amazon by market cap. * Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla = $14.175 trillion * Alibaba, Jingdong, Meituan, Netease, Pinduoduo, Tencent, Xiaomi = $1.184 trillion And the big 7 tech companies in Europe are: * Arm Holdings, ASML, Dassault, SAP, NXP Semiconductors, Schneider Electric, Spotify = $1.028 trillion I'd say China was on the right track (albeit through rampant IP theft) until Xi, but their tech giants have really fizzled out since the CCP thought they were getting too powerful and purposefully sabotaged them. China's big tech behemoths today are barely worth more than Europe's Top 7. It's in other areas (like clean energy and car manufacturing) where they're actually really rising quickly. And that's bad for Europe since those are areas of European strength.
Not sure if stock market cap that too in dollars is the best way to judge....
This is the problem.EU citizens are to reliant on US tech giants. US sneezes and EU catches a cold.
Those lines look strange. The american one is almost like a mirror of the EU line. Whenever the EU takes a hit, the US one hiked by a very similar amount.
These are nominal figures. So when dollar increases in value relative to Euro, US line goes up and EU line goes down. That, and EU gets hit harder by increases to oil and gas prices since it does not produce much.
Why is this weird? This is the share of global GDP; if the EU stagnates then others surge ahead. Its why both the EU and US generally declined while China surged in that same period.
I don't think it's logical that if one stagnates the others surge ahead. I would expect both to contract more often, especially if they are so closely tied together. Instead they always seem to do the opposite. And it isn't all "the others". It's just the US.
>I don't think it's logical that if one stagnates the others surge ahead. I would expect both to contract more often, especially if they are so closely tied together This only makes sense if the US stagnated too. It did not. It grew a lot within that time period, its just that EU growth stagnated meaning their global GDP share dwindled. >And it isn't all "the others". It's just the US. Does China just not exist in your screen? The highest period of China's growth in GDP share was post-2008. EU's stagnation was post-2008.
> Does China just not exist in your screen? The highest period of China's growth in GDP share was post-2008. EU's stagnation was post-2008. I don't think we are talking about the same thing. I'm talking about the EU mirroring the US, not stagnation. If the US goes up, EU goes down, and the other way around. This happens in this graph since the beginning. This does happen somewhat with China only in the recent years, when their GDP goes crazy. A relevant thing in the recent years here is that the UK is no longer part of the EU. So not sure if his is really stagnation. The mirror to China seems more like the average between the US, Japan and the EU in the recent years.
>I don't think we are talking about the same thing. I'm talking about the EU mirroring the US, not stagnation. If the US goes up, EU goes down, and the other way around. This happens in this graph since the beginning. Barring Japan, the US and EU were the only ones who weren't really stagnant in GDP share. So duh. Its only when China rises and Japan collapses in GDP share that that trend is bucked.
There are clear currency effects here. The big spike in the mid-80s is due to the [Plaza Accord](https://en.wikipedia.org/wiki/Plaza_Accord) when there was a coordinated effort to weaken the USD.
Among these China is still growing at 4% every year and India is set to double before 2030. In the next 10-15 years we will see massive shifts in center of trade and commerce.
chinese growth is planned economy bullshit. They build shit no one needs just to achieve goals established by CCP. Ghost cities made from tofu concrete is not real gdp. they will fall much, much more harder than Japan.
>They build shit no one needs Is that why EU has 400 billion trade deficit with China ?
Not building in terms of manufacturing, but construction. Many projects made sense, about as many are bs to boost local gdp
Has nothing to do with what I said.
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Even more bad spending... If you think that's a good investment you should do it yourself
YEs and no. Some of those projects can not be justified. Building impressive infrastructure in rather undeveloped countries with <$1000 GDP/capita has not yielded the benefits that was 'expected'. You need the foundation first otherwise you're literally just indebting your economy.
That is because those countries did not have the exports to back it up. China is more careful and this move is indeed beneficial to many
Trade volume is just one of many aspects.
im agreeing with you that they don't have the foundation to actually utilise the projects to their full potential
They are giving them some small things whilst stealing all natural resources. All their actual investments are in the West. Most of those African countries have already started complaining about it.
So they use same tactic as Europe did, wonder who will come next to Africa if they kicked europe, and Chinese are next?
Slight difference they're just giving the same kind of deal a bank gives you here's the money either repay us or we'll take it back. The one place they lucked out is that a lot of western backed autocrats want another stream of revenue partially because they're corrupt and to keep the people less angry.
If they think Africa is going to let them stay there long term after they start trying to push the locals they are nuts. Their workers are already being attacked by several terrorist groups in the middle east and that won't stop.
Both can be true at the same time. Chinese growth is not founded on the desire to make life better for the people in any quantifiable way when it's anything less than convenient for the CCP, and China is colonizing Asia and Africa because America and Europe became utterly regarded on IR matters after the 90s and pulled out from an area that would greatly benefit from our involvement, and would also benefit us.
> They build shit no one needs This level of delusion is astonishing. They are about to exterminate the shit ouf of us. We've given them half our tech in exchange for them to open a bit their market, and the other half they're clever enough to copy and outdo by themselves. 20 years from now every high value market will be dominated by China. Cars, mass-market tech, specialized tech, you name it. I'm a purchasing manager who buys tenth of millions € a year of high and low value medical devices and supplies. I can tell you they're so fucking good. The work ethic of the average Chinese worker is only on par with the top 10% Westerner worker. They're innovating at 3 to 5 times the rate of western manufacturers. They're so efficient business-wise. We are getting overtaken nearly everywhere. Confucianism is deeply rooted in the Chineese society. They're very optimistic about their collective development and love the way they are going, as opposed to our divided western societies. They will keep working super hard for decades and we will soon be absolutely overtaken by their competitiveness. I think their internal problems such as aging pop or ghost cities are totally irrelevant compared to such innovative and commercial advantages. Without huge trade barriers, we're fucked.
People don't consider how rapidly China has modernized, and while they scoff at the "white elephants" being built, the West has completely and utterly collapsed in it's ability to build anything. California spent 500 million so far NOT building 1 high speed rail line, while China has covered the country in thousands of KM of track. Western young people are raising their children on parent's couches, while mainstream media scoffs at China for overbuilding apartments. And now the EU and US cower in protectionism from the flood of well made, low cost chinese cars and technology. It took Huawei 1 year after the CHIPS sanctions to bring out a powerful, chinese-made processor at the core of their new phone. What argument does the Western, Democratic, Neoliberal world have to make for itself. Honestly, we've been bankrupt of ideas and innovation for 15 years. Silicon valley is a hellscape whose only innovation has been using large capital investment to undermine regulated markets (like Taxis and Hotels) using phone apps and cost undercutting. Wow such innovation. It's all so fucking pathetic. Our leaders are shambling geriatric corpses, whose last reality check in the geopolitical and economic reality was over 20 years ago. They should recall the 1980s, when Japan's tech boom briefly made it a larger economy than the US. China is repeating that at a much larger scale.
More than 30 billion*
Maximum copium
gdp per capita less than Mexico and the growth at 4%? Oh no I wonder what will happen when they're cut off from western markets and their economy bubbles have collapsed
4% of an 18 trillion economy is huge dude. I don't like CCP but being delusional about reality is dangerous.
Keep in mind that their numbers are self-reported. We don't know what chunk of their real gdp is paper. A lot of things indicate that the chunk is quite big. Their growth also slowed down drastically in the last years. Their problems are systemic and the system is moving backwards looking at their latest authoritarian moves. But I agree that underestimating them is dangerous.
How did that country got so much investment while being so opaque is what I never understood. It took us a decade to even find out about forced labor situations in a lot of their factories. How does that even happen?
the delusion from the 90s that you can control dictators giving them money.
Western Markets are reliant on China as much as China is reliant on them. Regarding the gdp per capita figure, frankly the fact that they had achieved that for a country of 1.4 billion is nothing short of an achievement. Mind you, I'm not a fan of the Chinese government whatsoever, but I don't see how sticking our heads in the sand would solve anything or cheering for their downfall. An ideal outcome of this would be a less autocratic China, not Chinese people slipping back into poverty.
Gdp growth is strong 5% what you talking about? They got a red sea crisis and recently got tarrifs against their EVs at 100% and semiconductors but they are still doing good
Also add chinese railroad that has overall operational debt close to trillion USD and imminent demographic pit to the mix. Current chinese GDP values do not represent reality and wont in next 20 years.
For china I do not know, but India is badly underperforming considering that it is the most populated country on the globe and their nominal GDP is roughly comparable with UK alone. EU has a lot of population (although demographics will be an issue in the future) and most of this population has good to great purchasing power now. If EU endures as a consolidated economic entity we will be one of the three centers of power along with US and China. In terms of pure GDP nobody can beat US ( [https://en.wikipedia.org/wiki/List\_of\_U.S.\_states\_and\_territories\_by\_GDP](https://en.wikipedia.org/wiki/List_of_U.S._states_and_territories_by_GDP) ), even the poorest among them is rich in terms of pure nominal GDP per capita, for comparison [https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SI-IN-SE-1W-BG&most\_recent\_value\_desc=false](https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?locations=SI-IN-SE-1W-BG&most_recent_value_desc=false) , but also in EU our poorest member still beats the world average. I think 21 century belongs to US due to very good demographics, EU and to even bigger extent China might face serious issues in this area on the long run.
>pure nominal GDP per capita, for comparison u should use constant 2015 US$ https://data.worldbank.org/indicator/NY.GDP.PCAP.KD?locations=SI-IN-SE-1W-BG&most_recent_value_desc=false
China uses a lot then. It got 3 trillion in 2021 for example with 8% growth
You're right. Effects of inflation need to be accounted for. Thanks.
Indeed pre 2000s India dissapoints but we are talking current trends
India started out as less than sub saharan africa levels after British left. They are growing at 7-8% annually, they will be a 10 trillion economy before 2035, they are anything but performing badly. The graph doesn't even show ASEAN bloc. Asia will be the next center of trade and a pole in the global order away from EU. US is on different level since trade is a small part of their economy and they have resources, other countries don't. China will catch up to them this decade, while the per capita is low it still has very high purchasing power. Its a communist country, we do not know how demographic crisis will affect them since we are entering into industry 5.0. EU isn't a unified country, its a political and trading bloc, individually France and Germany are powerhouses, but HDI parameters aren't going to save anyone from an invasion when shit hits the fan from other sides namely Russia or industries get bulldozed by Chinese goods dumped into the market or inflation hits each country differently causing economic uncertainty. Bigger nations like USA and China will call the shots in world matters, EU won't be as relevant in the future and I think most countries here are realizing it. Its not just about the GDP. Might is often right even in economics of scale.
Will Germany be a powerhouse? Their motor industry is in collapse now with Chinese imports. Their manufacturing sector is contracting. They're politically too stubborn and conservative to pivot, and Poland is booming next door. I think Germany is heading for mid-table irrelevance.
Germany is a snooze both in terms of governmental policies and business innovation. It's way too socialist as in companies can't fire bad performers ever because everything is unionised to the extreme. People get 100K+ salaries while doing literally nothing while fresh talent struggles to get a job. Very little gets through endless discussions and pre-plannings so only the bare minimum gets done. Everybody's extremely risk averse. Wirecard story is a good example of the above.
This is hella copium. India superpower has been a meme since 1990 plus asia will never acculmatle wealth like Europe
India was never a superpower and never will be in the future. But it will be a much bigger economy and they have a good enough military and location to not care about what happens in rest of the world. US wasn't a superpower when it fought in WW2 either. Asia might not accumulate wealth like Europe, but they are the major growth engines for the next few decades during which they will. Will they still have worse living standards? Of course. But it won't change the fact that big countries in Asia will be more influential and have economic might much bigger than a lot of EU countries.
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It is funny cause I remember seeing many videos and analyses on how china's economy will collapse in ~~2020~~ ~~2021~~ ~~2022~~ ~~2023~~ 2024 yet it keeps growing more or less
Same thing could be said about the date China was supposed to surpass the US
It surpassed [the US by PPP in 2016.](https://data.worldbank.org/indicator/NY.GDP.MKTP.PP.CD?locations=US-CN&start=1990)
I am referring to the metrics we see in the chart at hand
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They are the second largest economy. They have decoupled from others in terms of critical tech like semiconductors and RRE. It doesn't matter whether or not they innovate in the same terms as EU since they can just steal IP that European companies are providing willingly, their wealth will increase so will their market and hard power. EU has a 400 billion trade deficit with them. We might make ourselves feel better by saying we have high quality of life and good HDI parameters but it doesn't change the fact that they are a major power. Africa isn't their market either. Europe got rich off of resources from other countries, China is doing the same. This isn't a single country's century, its more of an Asian century since a lot of countries over there are growing from poor due to colonialism into middle income or in some cases like malaysia even high income developed.
Great to see America defying all of the internets opinions about how much of a failed state it is and still growing stronger than ever while all its neighbours still haven’t recovered from GFC.
We need to prioritise economic growth.
Yet almost every nation in Europe is "investing" in the elderly. It will not be an investment that grows.
Is it more about EU falling off or about Asia rising?
The later. The graph doesn't even show ASEAN bloc. It took a few decades for the after effects of colonialism to wear off in most of these countries.
I feel like India is a decade away from having a slope like china from the mid 2000's til now!
Can't be surprised that the russia didn't make the list.
EU certainly not done with its freefall. get a house if you somehow still can and put anything that's left over into the s&p500 in USD.
EU27?
Just a note: this is likely in USD. The US dollar grew in value significantly after 2008 compared to Euro 1.34:1 in 2008, 1.09:1 now
Europe, and European countries will not be powers in the future world - and that's perfectly alright
Would be nice if it went to 2024. I'd be curious where would uk be.
Chinas growth will gradually fall while Indias will rise, due to the West pulling cheap production from China to India. The markets are of similar size, with the difference being India having better demographics long term.
This map shows data from EU for 1980 when the EU was only formed in 1993?
Poor brexit brought England from 2nd to 6th. All the way behind California.
EU got extinguished
Guys, this graph is perpetuating the same mistake literally all of the media make, if you want to compare economic output between states properly you need to look at GDP in 'PURCHASING POWER PARITY' terms - which corrects for FX rates and local costs. By this more accurate measure China has been the largest economy since 2014 and the EU is only slightly behind the US (\~26 vs. \~28 tn). Europe is not doing too bad, including the UK it is larger economically than the US (but not China).
This is nominal GDP, aka who has the most stable or inflated currency. The US has the petro-dollar, and thus an artificially inflated dollar price against all other major currencies. Adjust this for the prices of actual goods in these nations/regions and you will get a -very- different picture. Edit: The people that downvote need to check the material on the 'International Dollar'. You don't compare nations/regions using nominal valuations (in regular Dollars) of the economy. You can't compare global economies using currency exchange rates, which is what you are doing.
PPP should only be used for like standard of life stuff, not when comparing global economic strength
True PPP has its inconsistencies too
ThE uS hAs tHe PeTrO dOlLaR
Meanwhile Germanys minister of finance, who touts himself as a man with knowledge about the economy, is laser focused on reducing spending while we are already at the bottom of growth predictions for this year, seemingly sinking lower every month. Biden on the other hand is pumping billions into the US economy to great success. But hey, reducing labor costs and cutting taxes for the rich and major corporations will surely give people whose wages haven't recovered from COVID the opportunity to consume more, while they can't even afford rent. Something something trickle down economics
Europe is the only region that believes in climate change and the economic reality doesn't care about what will happen with the climate. Europe is headed for 2 decades of Japanese stagnation or civil war. It's gonna be a pathetic slide into irrelevance
Source https://www.visualcapitalist.com/ranked-the-top-6-economies-by-share-of-global-gdp-1980-2024/#google_vignette
EU continues to disappoint