As one of the most influential think tanks in the conservative faction of the United States, Hudson Institute published an article on March 9 stating, "China's economy will surpass that of the United States within a decade." The article's author, Patrick M. Cronin, chairman of the Asia-Pacific Security Program at the Hudson Institute, also emphasized that "in contrast, there is not only information bias within the United States but also 'overconfidence'."
The article opens by stating, "China is an economy comparable in strength to the United States and may surpass the United States in economic scale within the next decade."
The article points out that in many economic indicators, China has already or is about to surpass the United States, for example, "looking at the scale of manufacturing or total trade volume."
Naturally, there are many similar data, such as China's electricity generation being more than twice that of the United States. If calculated by purchasing power parity GDP, China's economic size has already exceeded that of the United States—therefore, the article's statement that "China's economy will surpass the United States within a decade" mainly refers to nominal GDP.
By 2025, China's GDP calculated in US dollars is roughly close to 20 trillion, while the United States is 30 trillion. However, when analyzing the composition of China and U.S. GDP, it can be found that China leads the United States in almost all real economy GDP. The United States' biggest advantage lies in real estate (non-physical real estate-related industries including virtual rent), healthcare, legal services, and financial services, such as the vast legal economy of the United States and the high-cost medical and commercial insurance economy.
The U.S. healthcare industry is massive, yet it hasn't translated into longer life expectancy for Americans
Cronin expressed concern in the article, but he also encouraged the United States, saying, "(However), the United States still has the opportunity to revitalize its own industry through policy, relying on the overall advantages of innovation and advanced manufacturing to turn the situation around." But he then admitted that truly "revitalizing American manufacturing" and "bringing manufacturing back to the United States" is full of "unpredictability."
These factors affecting American manufacturing could be "whether the U.S.-China economies will decouple," "the direction of new technology development," or even "whether the U.S. and China will remain in competition in the economy" for a long time.
What he said here is brief, but the core meaning is simple: Americans have uncertainty about the future of Sino-U.S. relations, which limits their actions in many areas. If the U.S.-China economies do not decouple, American manufacturing or related industries may not be determined to bring manufacturing back to the United States; if the U.S. and China remain in a competitive state for a long time, many American capital and industrial sectors would also hesitate to invest in China.
The article continues, "Measuring national power is not only about economic data. Gross Domestic Product (GDP), foreign investment (FDI), R&D investment, or the output of steel, ships, and semiconductors are important, but more critical is whether these resources can be transformed into practical capabilities. Strategic outcomes are more important than sheer production scale."
Cronin believes that the key now is that the United States still lacks a clear understanding of China. Although China may not fully understand the United States either, clearly, the United States is the more "ignorant" side.
He said, "People's perception of national power usually changes slowly, and habitual biases make it difficult to accept new information and lead to overconfidence." This results in misjudgments by U.S. decision-makers (whether in politics, business, or military) in many matters.
If you just look at GDP, the United States seems to still be far ahead. If you don't understand the real economic differences between China and the United States, the United States is easily prone to complacency and won't seriously consider how to respond to China's economic rise.
The article cites the requirements for economic development in the "14th Five-Year Plan" during the Two Sessions, which aims to offset the impact of slowing growth by developing "new quality productive forces" and mastering new technologies and industries.
However, the industries considered as "new quality productive forces," such as artificial intelligence (including embodied AI and intelligent robots), digital economy, semiconductors and integrated circuits, high-end manufacturing and smart equipment, new energy and green energy, biotechnology and healthcare, quantum technology and new materials, and aerospace and marine equipment—most of these will face fierce competition with their U.S. counterparts.
Has the United States made targeted strategy preparations in these core industries that determine the future economic structure of the two countries?
As a conservative, Cronin naturally hopes to take a stronger stance against China. He is not praising China's economy or the "magical" economic miracle, but rather warning the U.S. elite decision-making circles: You may think you know that China is already very powerful, but you actually don't know exactly where China is strong.
Just like Elon Musk recently expressed surprise on social media by sharing a post about China's electricity generation, the U.S. elite class still has a vague concept of China's national power.
CNBC's report
As an example, late on March 9 (note), the U.S. financial media CNBC reported under the title "China's exports far exceed expectations, trade surplus surges to record high," stating, "China's trade surplus in the combined period of January to February reached a historical high, and exports far exceeded market expectations, showing that despite trade tensions with the United States, the Chinese economy remains remarkably resilient."
Note: The time of CNBC's article was a few hours later than Cronin's article.
This report also stated that "compared to the same period last year, China's trade with the United States decreased by 16.9%, reaching 609.71 billion yuan (about 88.22 billion U.S. dollars); at the same time, China's trade with the European Union increased by 19.9%, reaching 998.94 billion yuan."
In other words, significantly reducing trade with the U.S. did not hinder our exports, but instead further stimulated China's export performance to set new records!
This completely surprised the U.S. decision-making circle, and even the original author Cronin might not have known that shortly after his article, CNBC released this article that "contradicted" him—because while Cronin was complaining about the U.S. ignorance of China, he himself also "ignorantly" believed that China had "structural dependence on exports" and similar problems.
Actually, in the combined period from January to February, China's exports increased by 21.8% year-on-year, far exceeding the 7.1% increase predicted by Reuters survey economists; in the domestic market, China's consumer price index (CPI) in February rose by 1.3% year-on-year, far exceeding the 0.8% increase predicted by Reuters survey economists—this increase also marked the strongest rebound since January 2023.
As CNBC mentioned earlier, the "resilience" of the Chinese economy is "unimaginable" by the U.S. decision-making circle and elite class.
Returning to Cronin's article, he is astonished that even today, the United States still cannot clearly assess itself and China. He stated that the recent release of the U.S. National Security Strategy.
Although this document correctly emphasizes the importance of economic competition, it also carries a certain "magic thinking," claiming that the United States will maintain peace and order through "overwhelming superiority," and this concept is too broad, making it almost anything.
That is, the Trump administration's guiding national policy report only loudly claims "to lead in all aspects."
At the end of the article, Cronin pessimistically states that if this continues, the global economic landscape may change completely by mid-century—America may no longer have a dominant position.
Original: toutiao.com/article/7615508883276186153/
Statement: The article represents the views of the author alone.