When it comes to comparing China and the United States, the sheer size of both economies often grabs attention. Yet Professor Huang Yasheng, a well-known Chinese economist, warns against believing in the “decline of America” narrative. He stresses that while total economic output matters, per capita indicators reveal the real gap between the two nations.
According to 2024 data, China’s per capita GDP is about $12,500, while the U.S. exceeds $85,000—roughly 15% of America’s level. Breaking it down further, the average annual household income in China is less than $10,000, compared to the U.S. median of $74,000, putting China at just 8% of American levels. Huang attributes this disparity to the U.S.’s long-term accumulation of technological advantages and efficient resource allocation.
China has become the world’s leading manufacturing powerhouse, with exports topping the globe, but low per capita output exposes structural weaknesses. Heavy reliance on exports and insufficient domestic demand make growth vulnerable to external shocks. During trade frictions, fluctuations in corporate orders highlight this fragility. Huang argues that soberly assessing these figures is essential to avoid blind optimism and instead drive domestic reforms. Investing in education and skills training could gradually narrow the gap. Reports show the average hourly wage in the U.S. is about $30, compared to China’s $6, a limitation that directly hampers innovation diffusion.
In certain sectors, such as new energy vehicles and high-speed rail, China has made notable strides. Yet Huang cautions that these achievements cannot mask broader weaknesses. The U.S. dominates in core technology patents, while China remains concentrated in assembly and production. Although China accounts for 35% of global manufacturing capacity, its share of global consumption is just 10%. This imbalance is partly rooted in land and institutional policies. Rural land is often converted to industrial use at low cost, benefiting manufacturers but suppressing farmers’ income growth. With farmers’ per capita property income averaging just 300 RMB annually, rural purchasing power lags far behind urban levels, weakening overall consumption.
To unleash domestic demand, improving rural welfare, strengthening social security, and ensuring property rights are vital. Despite its 1.4 billion population, China’s internal market potential remains underutilized, leaving the economy dependent on external demand. During the U.S.–China trade war, 15–20 million jobs tied to exports were directly affected, underscoring the risk. While turning to “Belt and Road” markets offers opportunities, their scale is limited—Russia’s entire economy, for instance, is roughly the size of Guangdong Province. In the long term, boosting total factor productivity through technological upgrading is key.
Patent filings from China now top the world, but their quality remains uneven. Many patents are strong in business models and applications but lack original breakthroughs. In AI, for example, China has broad applications but relies on foundational models originating in the U.S. Without systems like ChatGPT, China’s AI progress might have lagged further. This underscores differences in innovation ecosystems: the U.S. benefits from strong consumer purchasing power to drive advanced demand, while China’s consumption is still focused on basics.
Structural reforms, such as land policy adjustments and loosening household registration (hukou) restrictions, could enhance labor mobility and reduce systemic imbalances. Empowering private enterprises with financing and innovation support, rather than leaning heavily on state-owned enterprises, would also raise efficiency.
Huang acknowledges China’s global successes—such as its leadership in EVs, 5G equipment, drones, and even the rollout of domestically produced passenger aircraft. However, when calculated per capita, these achievements are diluted. China’s low-cost advantage is also its low-income weakness, and overcoming it requires deeper reforms.
Rather than fixating on challenging America head-on, Huang argues that China should focus on high-quality growth, innovation, and balanced development. By recognizing structural issues—income disparities, weak consumption, and innovation bottlenecks—China can chart a more sustainable path. “The so-called decline of America is more myth than fact,” Huang emphasizes. “China’s strength lies in acknowledging its gaps and reforming accordingly.”
References
- World Bank, IMF, ILO, and international economic reports cited by Huang Yasheng in his research and publications.
- Huang, Yasheng. Recent analyses on China-U.S. economic comparison (2024).
