Between two giants
How the European Union compares with the United States and China on each theme.
AI and digital
The gap is not in using AI. It is in making it.
The United States spends 3.4% of its GDP on research. China spends 2.7%, and rising. The EU has hovered around 2% for a decade, reaching 2.1% in 2024. Almost all of the difference lies in business investment: 2.7% of GDP in the US, 2.1% in China and 1.4% in the EU.
Europe invests less in research, and the gap lies in business
R&D expenditure, total and business, as % of GDP
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That investment shows up in what gets invented. In international AI patent applications, the US and China each file almost three times as many as the EU. Per person, the US patents four times more AI than the EU, while China and the EU are level.
In AI patents, the US and China are in another league
International (PCT) AI patent applications, by inventor country and priority year
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In the AI models that set the pace of the field, the distance is even wider. Since 2023, EU organisations have taken part in 18 notable models. US organisations, in 250. Chinese ones, in 120.
The AI models that set the pace are built in the US and China
Notable AI models released each year, by country of the developing organisations
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Trade and dependencies
World trade has shifted its centre of gravity in two decades.
In 2002, the EU supplied 18.9% of world goods exports and China 6.5%. China has exported more than the EU since 2015, and by 2024 it accounted for 18.7% of the world total, against the EU's 14.7%. The United States is above all a big buyer: it takes in more than 16% of the world's imports.
China now exports more than the EU: its share of world trade has almost tripled since 2002
Each economy's share of world exports or imports of goods, in %
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The accounts sum it up. In 2024, China sold the world 916 billion euros more than it bought. The United States, the other way round, bought 1.19 trillion more than it sold. The EU, with a surplus of 133 billion, sits in between.
China sells to the world, the US buys, and the EU sits in between
Trade balance in goods (exports minus imports), in billions of euros
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Productivity and growth
China is now the world's largest economy. The EU and the US weigh almost the same, but they do not produce the same.
Measured in purchasing power, China's economy has been larger than the US's since 2014 and now accounts for 19.1% of world GDP. The EU (14.4%) and the US (14.7%) are practically level, and both weigh far less than in 1990, when each was above 20%.
China is now the world's largest economy in purchasing power. The EU and the US weigh almost the same
Each economy's share of world GDP, measured in purchasing power parity, in %
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The difference lies in productivity. In 2024, each hour worked in the EU produced 69.8 dollars, against 80.6 in the US: 13% less. In 2019 the gap was 7%. China, at 19.7 dollars per hour, is still far behind both.
For every hour worked, the EU produces 13% less than the US, and the gap has widened since 2019
GDP per hour worked, in constant 2021 dollars at purchasing power parity
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Freedoms, well-being and climate
On democracy, health and climate, the EU fares better than both giants.
According to V-Dem, US democracy fell in 2025 to 0.57 out of 1, its lowest level this century and now below the EU median (0.74). China remains at the opposite end, at 0.04.
US democracy fell in 2025 to its lowest level this century, below the EU median
V-Dem liberal democracy index, from 0 (none) to 1 (full)
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People in the EU live 81.6 years on average, almost three more than in the US (78.9), where life expectancy has barely changed since 2010. China, at 78.0, has nearly caught up with the US.
People in the EU live almost three years longer than in the US, and China has nearly caught up with the US
Life expectancy at birth, in years
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On climate, each American emits 13.6 tonnes of CO₂ a year, more than twice as much as a European (5.5). A Chinese person now emits 9.3 tonnes: more than a European since 2012.
A Chinese person now emits more CO₂ than a European; an American, more than twice as much
CO₂ emissions per person, in tonnes a year (excluding land use change)
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Health
The US spends far more on health than anyone else. The EU spends less and lives longer.
In 2023, the US spent 16.7% of its GDP on health; the EU, 10%, and China, 5.9%. In 2000 the figures were 12.5%, 8.4% and 4.5%. The pandemic pushed spending up in 2020 and 2021, and it fell back afterwards.
The US spends 16.7% of its GDP on health; the EU, 10%, and China, less than 6%
Current health expenditure, public and private, as % of GDP
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Per person, the gap is even wider. The US spent $13,473 per person, 2.3 times as much as the EU ($5,806), measured at purchasing power parity. China spent $1,487. And yet people in the EU live three years longer than in the US: 81.4 years against 78.4 in 2023, as shown in the freedoms, well-being and climate theme.
Per person, the US spends 2.3 times as much on health as the EU
Current health expenditure per person, in current international dollars at purchasing power parity
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Money and payments
The euro area has more cash than the US and China relative to its GDP. In electronic payments, the US is ahead and China has grown the fastest.
In 2024, euro banknotes and coins were worth 10.7% of euro area GDP. In China, 9.9%, and in the US, 7.9%. All three rose in 2020, with the pandemic, and the euro area reached 12.6%. Since then cash has weighed less in the euro area and the US, while in China it has grown again since 2021.
The euro area holds more cash relative to its economy than China and the US: 10.7% of its GDP
Banknotes and coins in circulation, as % of GDP
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Holding a lot of cash does not mean using it to pay: part of it is kept as savings and part circulates abroad. Electronic payments tell a different story. In 2024, the US made 644 cashless payments per person, and China 402, almost 28 times as many as in 2012. The BIS does not publish an EU figure, but it does for seven EU countries. Sweden (685) is ahead of the US; Belgium, France and Germany sit between the US and China, and Spain (364) and Italy (247) are below China.
Sweden makes more cashless payments per person than the US; China has multiplied them by almost 28 since 2012
Cashless payments (cards, credit transfers, direct debits, e-money and cheques) per person per year
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The two giants have chosen opposite paths for digital money. China has been testing its digital yuan, the e-CNY, issued by its central bank, since the end of 2019. The US has gone the other way: in January 2025 an executive order barred federal agencies from creating or promoting a digital dollar, and in July 2025 the GENIUS Act regulated stablecoins, private digital coins backed by dollar assets.
Housing and the cost of living
After inflation, housing has become far more expensive in the US than in the euro area. In China, it has become cheaper.
In 2025, real house prices in the euro area were 11% higher than in 2010. In the US, 58.5% higher, and in China, 10.5% lower. The three blocs have taken different paths: in the euro area, real prices fell until 2013 and peaked in 2021; in the US they collapsed after the 2008 crisis, bottomed out in 2011 and hit their peak in 2024; in China they peaked in 2021 and in 2025 were at the lowest level of the whole series, which starts in 2006.
After inflation, housing costs 11% more than in 2010 in the euro area, 58.5% more in the US and 10.5% less in China
Real residential property prices, index 2010 = 100, annual average
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These are prices after inflation. Without adjusting for it, housing in the EU rose 62% between 2015 and 2025, as note N01 showed, almost twice as much as prices overall. Rents have also climbed much more across the Atlantic: between 2015 and 2024 they rose 46.9% in the US and 15.5% in the euro area, at current prices.
Between 2015 and 2024, rents rose 46.9% in the US and 15.5% in the euro area
Rent price index, 2015 = 100, at current prices
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Energy
An American uses more than twice as much energy as a European, and the average person in China has now overtaken the average European.
In 2024, each person in the EU used 2,768 kilograms of oil equivalent in primary energy. In the US, 6,454, 2.3 times as much. China has gone from 898 kilograms in 2000 to 2,947 in 2024, 3.3 times as much, and has been ahead of the EU since 2023. Europe and the US use less than at the turn of the century: 19.2% less per person in the EU and 19.9% less in the US. Within the EU, 17 of the 27 countries now use less energy per person than China.
A person in China now uses more energy than one in the EU; a person in the US, 2.3 times as much
Primary energy use per person, in kilograms of oil equivalent
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The clearest difference is in electricity. In 2024, 27.8% of the electricity produced in the EU came from fossil fuels; in the US, 58.3%, and in China, 61.6%. Coal generates 10.5% of Europe's electricity, down from 31.8% in 2000; in China it is still 58.6%. The US has also moved away from coal (from 52.5% to 15.7%), but has replaced it mainly with gas, which now provides 42% of its electricity. The EU relies on nuclear (23%) and on wind, solar and other sources, which have risen from 2.6% to 35%.
In the EU, 27.8% of electricity comes from fossil fuels; in the US, 58.3%, and in China, 61.6%
Electricity production by source, as % of the total
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Notes through this lens
- US public debt exceeds 120% of GDP; the EU's, 80%In 2001, the EU owed more than the US. Today the US owes 122.3% of its GDP and the EU 81.6%. Within the EU, 12 of the 27 countries exceed the 60% set in the Treaty.
- The Draghi report, two years on: what it asked for, what has been done and what the data say todayIn 2024 Mario Draghi warned that Europe faced an existential challenge: it grows less, innovates less, pays more for energy and relies on others for its security. Two years on, defence spending has risen sharply, but investment and energy remain far from what he asked for.
- The Draghi report in two charts: Europe grows less and needs to invest much moreSince 2000, the US economy has grown 69% and the EU's 41%. Draghi estimated that closing the gap requires an extra 750 to 800 billion euros of investment a year. Two years on, a quarter of his recommendations have been implemented.