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China’s GDP as a share of the US peaked at 78% in 2021 and fell to 64% in 2024…

2026-05-12 · 13:19 UTC ·@bscholl ·2 min read

Brief

Melissa Chen warns that China’s slowdown is structural: GDP share vs. the US dropped from 78% in 2021 to 64% in 2024, the RMB weakened, and deflation plus overcapacity persist. Equity markets show U.S. gains ($45T→$55–60T) versus Chinese declines ($13T→$10T); she argues the U.S. remains advantaged absent major self-inflicted policy failures.

Why it matters

China’s GDP as a share of the US peaked at 78% in 2021 and fell to 64% in 2024 despite reported ~5% annual growth; the author cites sharp RMB depreciation, deflation, and chronic overcapacity as constraints on closing the nominal USD gap.

Key details

  • Market-cap signal: S&P 500 rose from about $45 trillion in 2021 to $55–60 trillion, while Chinese indices (CSI 300 + Hang Seng) slid from roughly $13 trillion at their peak to around $10 trillion, which the author interprets as evidence of a structural Chinese slowdown and hidden debt.
  • High-profile pro-engagement figures (Jamie Dimon, Ray Dalio) have shifted tune; timed as Trump heads to China to meet Xi (May 2026 context), the author concludes the US should remain dominant unless it self-sabotages.
Source evidence

If the US gets back to being capitalist while the CCP returns to its socialist roots, we win.

(Tbh it’d be better for the world if China embraced freedom and capitalism, but I’d settle for just having that in the West.)

Melissa Chen (@MsMelChen)

As Trump heads to China to meet Xi, it’s time for a reality check on the Chinese economy.

We’ve endured years of breathless talk about the “Asian century” and China’s inexorable rise. Elites couldn’t stop praising the “China model” with its state-led efficiency, gleaming infrastructure, and unstoppable momentum. That narrative has aged disastrously. So much so all the old pro-engagement business leaders have begun changing their tune to save face (Dimon, Dalio et al.)

Even with reported 5% annual growth, China is not closing the gap with the US in nominal USD terms. Its GDP as a share of America’s peaked at 78% in 2021 and has fallen to just 64% in 2024.

Yes the renminbi’s sharp depreciation against the dollar is true, but it begs the question of why did the currency weaken enough to slash China’s relative GDP by 14 percentage points in three years? Currency collapse is not a sign of strength. The RMB has recovered some ground over the past 18 months, yet deflation and chronic overcapacity will cap any sustained rally.

With PPP adjustments, the gap closes but the US is still richer than China. Don’t listen to the blackpillers saying the US is collapsing or the “dollar dominance is ending.” Both countries have debt problems but China knows how to creatively hide it.

Markets tell the starkest truth. US equities (S&P 500) have surged from ~$45 trillion in 2021 to $55–60 trillion. Chinese indices (CSI 300 + Hang Seng) have slid from ~$13 trillion at their peak to around $10 trillion. If this were just a currency story, America’s market values wouldn’t be booming while China’s shrank in absolute terms.

The bottom line: China’s slowdown is structural. America is in much better shape and barring some epic self-cucking, the US should still be dominant

— https://nitter.net/MsMelChen/status/2053828832570876105#m