The National Bureau of Statistics has released the full-year economic data for 2022, and we have observed that in recent years, our country's economic aggregate has been stepping up each year. However, regrettably, the gap between our country's GDP and that of the United States continues to widen, and the disparity formed in 2022 is quite astonishing, reaching 7.5 trillion U.S. dollars.

What should we do?

Don't worry, upon careful analysis, we find that the U.S. GDP is merely a false prosperity with a significant amount of inflation.

01, China's Continuous Growth

Despite the impact of the pandemic on our economy since its onset, our country's GDP has been stepping up over these three years.

At the beginning of 2020, when the pandemic broke out, many places were under lockdown for several months, yet the GDP for that year surpassed 100 trillion yuan.

In 2021, the impact of the pandemic persisted, but the GDP rose to 110 trillion yuan.

The impact in 2022 seemed even greater, especially from March to May, when the lockdowns in key cities like Shanghai severely affected the national economic industry chain. However, last year's total GDP further increased to over 120 trillion yuan.

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Our GDP growth rate for the whole year of last year reached 3%, which is truly commendable.In the previous week, the United States announced the growth rate of GDP for the fourth quarter of last year, which was revised down from the initial 2.9% to 2.7%.

Additionally, the forecasting model of the Federal Reserve Bank of Atlanta suggests that in the first quarter of this year, the U.S. GDP will continue to grow by 2.8% on a quarter-over-quarter basis.

Focusing solely on the growth rates, China's is higher than that of the United States. Of course, the meanings of the two growth rates are different; ours is the annual growth rate, while the United States announces annualized data of quarter-over-quarter growth rates.

02, The Gap Widens

Therefore, we can compare the total GDP figures.

In 2022, the total GDP of the United States was $25.5 trillion, but China's GDP, after conversion, remained at the level of 18 trillion. Over the course of the year, the gap between the two countries has widened by more than $200 billion.

Thus, it is a fact that the GDP gap between China and the United States has expanded, at least in terms of the data.

However, there is a hidden story behind this fact.

Calculated in Chinese yuan, our GDP has been continuously increasing over the past three years, but when calculated in U.S. dollars, we find that from 2021 to 2022, our country's GDP has remained at $18 trillion, with no increase.

Where has the increase in the amount of yuan or the annual growth of 3% gone?It turns out that the devaluation of the Chinese yuan against the US dollar has consumed much of the difference, hence the gap between the two has been greatly influenced by exchange rates.

However, the more significant impact lies in inflation.

Last year, the inflation rate in the United States was as high as 7% to 9%, so most of the more than $2 trillion increase in the US GDP came from the contribution of rising prices.

If our country's GDP is calculated in yuan, the nominal growth rate last year also reached 5.2%, but there is a considerable gap with the actual growth rate of 3%, and this gap is the difference in price growth.

Since our country's inflation is only 2%, the difference between the actual growth rate and the nominal growth rate is probably around two percentage points.

Therefore, our conclusion is that although the US GDP growth rate is quite high and the gap with China has indeed widened, this is all due to the reasons of exchange rate depreciation and price increases, and the US GDP is too watered down.

03, China's High-Quality Growth

Entering 2023, the inflation in the United States is still hovering at a high level.

The recently released CPI or PCE, compared with the data from 1982 to 2021, is still very high, only slightly lower than the highest in the middle of 2022.

So in 2023, the increase in US prices will once again contribute a huge force to the US GDP.In January of this year, China's CPI was 2.1%, almost consistent with the average level of last year. Currently, it seems that the inflationary pressure in China for the year 2023 will not be significant, and its "contribution" to GDP should also not be substantial.

Therefore, it is possible that by the end of 2023, the gap in GDP between China and the United States could further widen.

However, this is not really a concern, as from the perspective of purchasing power, our GDP is even higher than that of the United States.

At the same time, over the next few years, China's total population may remain stable or slightly decrease, while our total GDP will continue to increase, thus our per capita GDP will also increase. It has already reached $12,700, and according to the World Bank's standards, we are now just one step away from being a high-income country.

Therefore, China is on the verge of entering the ranks of high-income countries.