China is one of the largest trading partners of the U.S. China’s global influence is growing and is projected to become a super-power in the future while America’s economic power is said to be in decline. As the countries follow different political and economic systems, I wanted to compare some of the differences between these two large economies.
The table below compares select economic factors between China and the U.S.:
Item China U.S.A
GDP Size $5.745tn $14.6tn
Labor Force 780 Million 154.9 million
Unemployment Rate 4.30 per cent 9.70 per cent
Population below Povery Rate 2.80 per cent 12.0 per cent
Budget-Revenue $1.149tn $2.02tn
Budget-Expenditures $1.27tn $3.397tn
Public Debt 17.5 per cent of GDP 58.9 per cent of GDP
Oil Consumption 8.2 million bbl/day 18.69 million bbl/day
Current Account Balance $272.5bn $ -561.0bn
Debt – External $406.6bn $13.98tn
FDI Abroad $278.9bn $3.507tn
Note: Some of the data shown may not be the latest. I have used them exactly as it is in the CIA site.
Source: The World Factbook, CIA
At just over $5tn, the economy of China is less than half the size of the American economy. Despite having a huge population, the unemployment rate is lower in China than in the US. This is not surprising since China employs millions of workers in the manufacturing sector due to lower wages.
Unlike China, the U.S. spends more than 50 per cent above its annual revenues leading to high deficits. Hence the public debt as a percentage of GDP is higher for the U.S. relative to China and the current account balance is negative as well. In addition, the external debt owed by China is just $406bn compared to a staggering $14tn by the U.S. The auto market in China is growing faster than in the U.S. However since the total number of cars on the road is much lesser than the U.S. China’s oil consumption is lower relative to the U.S. With soaring auto sales China’s oil consumption is projected to rise further.