China Expected to Surpass United States as World’s Largest Economy by 2028, Report Says | China

China will overtake the United States as the world’s largest economy before the end of the decade, according to a report, after overtaking its rival during the global Covid-19 pandemic.

The Center for Economics and Business Research said it now expects the value of China’s economy, measured in dollars, to exceed that of the United States by 2028, a half-decade earlier than he hadn’t foreseen it a year ago.

In its annual ranking of the growth prospects of 193 countries, the UK-based advisory group said China has rebounded quickly from the effects of Covid-19 and will grow by 2% in 2020, as the world’s only major economy. to develop.

With the United States expected to contract 5% this year, China will close the gap with its biggest rival, the CEBR said. Overall, global gross domestic product is expected to decline 4.4% this year, the biggest drop in a year since World War II.

Douglas McWilliams, Vice President of CEBR, said: “The big news in this forecast is the rate of growth of the Chinese economy. We expect it to become a high income economy during the current five year plan period (2020-25). And we expect it to overtake the United States five years earlier than a year ago.

“Other Asian economies are also moving up the rankings. One lesson for Western policymakers, who performed relatively poorly during the pandemic, is that they need to pay much more attention to what’s going on in Asia rather than just looking at each other.

China’s share of global GDP increased from 3.6% in 2000 to 17.8% in 2019 and will continue to grow, the CEBR said. It would exceed the per capita threshold of $ 12,536 (£ 9,215) to become a high-income country by 2023.

Even so, the standard of living in China will remain much lower than that of the United States and Western European countries. In the United States, the average per capita income is just over $ 63,000, while in the United Kingdom it is just over $ 39,000.

The CEBR said leaving the EU would not prevent the UK – likely the world’s fifth-largest economy in 2020 – from being one of the best-performing economies over the next 15 years.

“We expect the trend growth rate for the UK to be 4.0% per year from 2021 to 25 and 1.8% per year from 2026 to 30 and 1.8% per year from 2031 to 2035”, the consulting firm said.

“The UK is expected to be overtaken by India in 2024, but it will retain its place in the ranking until 2025. By 2035, UK GDP in dollars is expected to be 40% higher than that of France,” its longtime rival and neighbor. “

India, after overtaking France and the UK last year, has fallen behind the UK due to a sharp drop in the value of the rupee. But the decline will be short-lived, with the world’s second most populous country on track to be its third largest economy by 2035.

The CEBR said environmental problems would begin to have a serious impact on the shape of the world economy over the next 15 years, after a period in which the effects of global warming became apparent faster than expected. feared him before.

“Sea level is expected to have risen 45cm from the 2000 baseline by 2035. This compares to the smallest 20cm rise by 2030 predicted two years ago.”

As more countries consider making the transition to a net zero carbon economy in the decades to come, the CEBR said there will be lower demand for fossil fuels and lower oil prices. The cost of a barrel of crude would fall below $ 30 by 2035, he said.