China will overtake the United States to become the world’s largest economy by 2028, five years ahead of schedule, according to a report.
The UK-based Center for Economics and Business Research (CEBR) said China’s “skillful” handling of Covid-19 would boost its relative growth compared to the US and Europe in the years future.
Meanwhile, India is expected to become the third largest economy by 2030.
The CEBR publishes its economic ranking each year on December 26.
Although China was the first country to be hit by Covid-19, it has brought the disease under control with swift and extremely strict action, meaning it has not needed to repeat economically crippling lockdowns as has happened. made European countries.
As a result, unlike other large economies, it avoided an economic recession in 2020 and is in fact expected to grow 2% this year.
The US economy, on the other hand, has been hit hard by the world’s worst coronavirus outbreak in terms of numbers. More than 330,000 people have died in the United States and there have been some 18.5 million confirmed cases.
The economic damage has been cushioned by monetary policy and a huge fiscal stimulus, but political disagreements over a new stimulus package could leave around 14 million Americans without unemployment benefits in the new year.
“For a while, a dominant theme in the global economy has been the struggle for economic power and soft power between the United States and China,” the CEBR report said. “The Covid-19 pandemic and the corresponding economic fallout have certainly tilted this rivalry in favor of China. “
The report states that after “a strong post-pandemic rebound in 2021”, the US economy will grow by about 1.9% per year from 2022 to 24, then slow to 1.6% in the years that follow.
In contrast, the Chinese economy is expected to grow by 5.7% per year until 2025 and 4.5% per year from 2026 to 2030.
China’s share of the global economy has grown from just 3.6 percent in 2000 to 17.8 percent today and the country will become a “high-income economy” by 2023, according to the report.
But the average Chinese will remain far poorer in financial terms than the average American, even after China becomes the world’s largest economy, given that China’s population is four times larger.
In other predictions:
- Britain’s post-Brexit economy will grow by 4% per year from 2021-25 and 1.8% per year from 2026-30 (after declining in 2020)
- India had overtaken the UK as the fifth largest economy in 2019, but slipped behind it again due to the impact of the pandemic. It will not resume until 2024, according to the CEBR
- India’s economy to overtake Germany in 2027 and Japan in 2030