Goldman Sachs Chairman and CEO Lloyd Blankfein told CNBC it’s inevitable that the Chinese economy will be bigger than the U.S. economy based on the sheer population disparity alone.
“These are the two biggest economies in the world,” Blankfein said in an interview from Beijing, where he is traveling with President Donald Trump as part of a delegation of business leaders.
“On a constant dollar basis,” taking inflation into account, the Chinese economy is not that close to exceeding the U.S. economy in the near term, Blankfein said. U.S. gross domestic product was about $18.5 trillion in 2016 compared with Chinese GDP of $11.4 trillion.
According to a PwC study, the Chinese economy will overtake the U.S. economy by 2030 by about $26.5 trillion to $23.5 trillion.
But on the measure of “purchasing power,” China has already surpassed the U.S., Blankfein said.
When considering China’s population of nearly 1.4 billion people last year versus the U.S. population of about 326 million, it’s not surprising the race between the world’s two largest economies tips in China’s favor, Blankfein said, “It’s just a question of timing. Eventually, it will. But you have to keep in mind their population is four times the population of the United States.”
In CNBC interview, Blankfein also talked about his firm’s agreement to establish a $5 billion investment vehicle with China’s sovereign wealth fund. He also said that while he disagrees with Trump sometimes, he believes the president is supporting business by boosting the economy and helping all Americans.