In 2011, US GDP was $15.1T and China GDP was $7.3T. Assuming US continuously grows at annual rate of 2% and China at 7%, it would take China for 15 years to catch up. However, there are 2 big variables:
1. Can China grow at annual rate of 7% each year in the next 15 years. It was easier from $1,000 per capita but would be a challenge when it started around $5,000 per capita in 2011. This phenomenon occured in many developing countries. Korea and Taiwan are only two economies with population over 20M which have enjoyed sustained growth for more than 2 decades after reaching $5,000 threshold;
2. RMB appreciation. If RMB appreciates vs. USD, it will take shorter for China to catch up. But RMB appreciation will dampen exports, which will make 7% growth much less likely.
From the trend in last 2 years, it seems capital are moving out of China. Thus, I am not so optimistic about growth potential in China.
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| 2011 | rate | 5 | 10 | 15 | |
| US | 15.1 | 2.0% | 16.7 | 18.4 | 20.3 |
| China | 7.3 | 7.0% | 10.2 | 14.4 | 20.1 |
