Chinas GDP has surpassed that of the European Union for the first time in history in 2021, one year earlier than previously estimated, as EU posted its whole-year GDP performance on Monday, Global Times reported.
The 27-member EU posted a preliminary annual GDP growth of 5.2 percent on Monday, which translates into a GDP of 14.09 trillion euros, roughly $15.73 trillion in current dollars, below Chinas $18 trillion GDP recorded in 2021.
China beat market expectations with an 8.1-percent-grwoth for 2021, with GDP reaching 114.37 trillion yuan ($18 trillion), according to data released by the National Bureau of Statistics on January 17.
Analysts said overtaking EU in terms of GDP is a milestone event, meaning China is now the worlds second-largest economy in every sense, even compared with a giant economic bloc such as the EU.
From country perspective, China has been the worlds second-largest economy after overtaking Japan since 2010.
Analysts said the change in GDP ranking, faster than an October report by IMF that put “surpassing date” in 2022, reflected Chinese economy’s resilience despite the global pandemic and Chinas effective epidemic control policies.
The EU was for some time the worlds largest economy, with an economy even larger than that of the US in size. The withdrawal of the UK from the EU, which was a $2.7 trillion economy in 2020, prompted analysts to forecast Chinas overtaking of the bloc in recent years.
The faster-than-anticipated overtaking also underlined Chinas advancement in a wide range of sectors from new-energy vehicles and artificial intelligence to cloud computing and Internet of Things in recent years, eclipsing the EU which lacks such strengths, analysts said.
The EUs GDP in the first quarter of 2021 outstripped that of China, but Chinese economy has been expanding at a faster rate after that.
Cui Hongjian, director of the Department of European Studies at the China Institute of International Studies, told the Global Times on Monday that numerical advance in GDP ranking underlined Chinas advantage of having a vast market of 1.4 billion people and Chinas epidemic control efforts that withstood the economic onslaught of COVID-19.
The EU and the Chinese economy have different growth rhythms due to their inherent patterns, and the EU lacking of a strong internet economy and digital economy also accelerated Chinas overtaking of the bloc, Cui said.
However, Chinese analysts said the Chinese policymakers are no longer obsessed with GPD growth rate , shifting their attention to achieving higher quality growth and sustainability.
It should be noted that, on per capita terms, China still lags behind the US and the EU. In 2020, average per capita GDP of EU is about 3.6 times of Chinas while the figure of the US is about 6 times of Chinas.
In 2021, China’s GDP per capita was around $12,551, according to the NBS, nearing that of a “high-income country” as defined by the World Bank and overtaking the global average GDP per capita.
Analysts pointed out the GDP ranking battle is an ongoing one as different economies with marked difference in traits gear up to vie for performance in a seemingly foreseeable post-virus world.