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Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk drew attention on Tuesday to economic data showing China’s economy has significantly outgrown both the United States and European Union when measured by purchasing power parity.

What Happened: “This comes as a surprise to most people,” Musk wrote on X, citing data from xAI’s Grok chatbot indicating China’s gross domestic product in PPP terms is approximately $35.29 trillion in 2025, compared to $28.78 trillion for the U.S. and $21.99 trillion for the EU.

These figures suggest China’s economy is 1.23 times larger than America’s and 1.60 times larger than the EU’s when adjusted for domestic purchasing power.

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The World Bank’s most recent data supports this trend, showing China as the leading global economy with a PPP-adjusted GDP of approximately $34.66 trillion in 2023, compared to $27.72 trillion for the U.S.

According to International Monetary Fund projections for 2025, China’s economy is growing at 4% compared to 1.8% for the U.S. China is expected to account for 19.68% of global GDP based on PPP, while the U.S. represents 14.75%.

This comes as a surprise to most people
https://t.co/0UXAuA6BE4

— Elon Musk (@elonmusk) April 29, 2025

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Why It Matters: Musk’s comments came in response to billionaire investor Ray Dalio‘s warning about America’s declining economic influence. When Dalio suggested the U.S. remains the world’s primary consumer and debtor, Musk countered, “China is a much bigger consumer of manufactured goods than the United States. This year, Chinese consumers will buy more cars than America and Europe combined.”

The exchange highlights shifting global economic power as U.S.-China trade tensions escalate. Recent tariff increases exceeding 100% have led Chinese manufacturers to suspend operations and seek alternative markets, with Goldman Sachs downgrading China’s GDP growth forecasts to 4.0% for 2025.

Despite these challenges, China’s NDRC remains “fully confident” in meeting its 5% economic growth target for 2025, even as economists like Torsten Slok of Apollo Global Management warn of a “90% chance” of U.S. recession if current tariffs persist.

Photo Courtesy: bella1105 on Shutterstock.com

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This article Elon Musk Says Will Come As A 'Surprise To Most' As China's Economy Surpasses US And EU Amid Rising Tariffs And Growing Recession Fears originally appeared on Benzinga.com