CHART OF THE DAY: Growth forecasts for the US and China are increasingly diverging
Apollo
- Economic growth trends between the US and China have increasingly diverged throughout 2023.
- China has continued to suffer from a wobbly real estate market and a weak reopening from the pandemic.
- The US recently printed third-quarter GDP growth of 5.2%, its highest since 2021.
Our Chart of the Day is from Apollo chief economist Torsten Sløk, which shows that growth trends between the US and China are increasingly diverging.
Since the summer, growth expectations for China have declined while those for the US economic have steadily increased. The dynamic suggests that the world's two biggest economies are no longer tied to the hip as they once were.
China has suffered from a weak reopening from the COVID-19 pandemic, a wobbly real estate market, and challenging demographics, with youth unemployment above 20%. Economists expect China's annual real GDP growth to be 5.2%, which is below the peak estimate of 5.8% from this summer.
Meanwhile, the US just recorded its fastest quarter of economic growth since 2021, with third-quarter GDP at 5.2%. Annual real GDP growth for the US in 2023 is expected to be nearly 2.5%, which is more than quadruple estimates from earlier this year of just 0.5%.
The decoupling of the US and China's economy has also been evidenced by the US importing more goods from Mexico than China for the first time since 2003.
These trend changes comes as trade tensions between the US and China persist. This has led to US export controls on advanced AI chips to China, as well as technology companies seeking to diversify their supply chains out of China.
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