During his trip to Asia in May, Vice President Biden brought attention to this issue, and his national security adviser, Jake Sullivan, referred to it as “a quite striking example of how countries in this region should be looking at the question of trends and trajectories.”
However, according to a report that was released on Thursday (July 28), the gross domestic product (GDP) of the United States unexpectedly contracted at an annual rate of 0.9% during the previous quarter, which means that it is now highly unlikely that it will exceed China’s expansion this year.
As of the middle of May, Bloomberg Economics projected that China’s economy would expand by 2% this year, whereas the economy of the United States was projected to expand by 2.8%. This would be the first undershoot for the United States since 1976.
The team’s most recent projections put China’s growth at 3.6% and the United States at 1.5%.
This disparity is due to China having a better-than-expected second quarter while there is mounting evidence that the United States is entering a recession.
Heather Boushey, a member of the White House Council of Economic Advisers, was quoted as saying, “We don’t want to get wrapped up too much in any one month’s number, or one quarter’s number,” in response to a question regarding the relative countries’ growth prospects.
In both of the first two quarters of 2022, the Gross Domestic Product of the United States experienced a decline.
China’s economy shrank from the previous quarter when measured on a quarter-to-quarter basis; however, a rebound in data from June raised the chances of a modest recovery heading into the second half of the year.
Given that the US has a GDP that is measured per capita to be more than five times larger than its competitor, beating China would have been a remarkable accomplishment.
However, the Asian economy still has a significant distance to travel before it can catch up to the US economy.
However, only a few weeks ago, when a new wave of Covid lockdowns was wreaking havoc on spending and a property slump was getting deeper, it seemed possible.
Moving on from the data, the administration of Vice President Joe Biden is now highlighting movement this week on two pieces of economic legislation that are essential to the president’s larger campaign to “win the economic competition of the 21st century” with China, as he put it in his State of the Union speech earlier this year.
These pieces of legislation are key to the president’s broader campaign to “win the economic competition of the 21st century” with China.
On the program Bloomberg Balance of Power With David Westin that airs on Bloomberg Television, Boushey stated, “We want to see the US economy deliver over the long haul for the American people.”
“This is the reason why we are putting such a strong emphasis on the chips legislation and the Inflation Reduction Act. The competitiveness of the United States of America will be improved by both of these, but especially when taken together.
On Thursday, the House of Representatives unanimously approved a bill that represents the most significant increase in government funding for US industry and research in recent years. The bill allocates US$52 billion in grants and incentives for the production of domestic semiconductors.
That bill will need to be signed by Biden very soon.
This week, in the Senate, a new compromise bill was introduced by Democrats only that would include a slew of investments in clean energy.
This would enhance the competitiveness of the United States in a sector in which it has lagged behind.
Read more:-
- Doesn’t Sound Like a Recession’: Even though the Economy is Contracting 2, Vice President Biden is Optimistic.
- Another Decline in the Us Economy is Causing Recession Fears.
- The United States Economy Contracted for the Second Consecutive Quarter, Adding to Growing Concerns About an Impending Recession.
In the meantime, President Xi Jinping and his colleagues have started to downplay the target for growth of approximately 5.5 per cent that was established by the government in March.
According to a statement that was released after a meeting of the Politburo, which is the highest decision-making body within the Communist Party, the nation is expected to achieve “the best outcome” possible for growth this year while adhering to a strict Covid Zero policy.
There is a possibility that Xi and his counterpart in the United States will have the chance to meet in person and talk about the comparative growth rates of their respective economies.
During a call on Thursday, they decided to have their first face-to-face conversation since Biden became president, so they instructed their aides to set up a meeting for them.
