Asian Dawn: Think Tank Claims China Will Supplant US as Largest Economy in 2032
REUTERS/ Hyungwon KangBusiness01:00 27.12.2017(updated 01:05 27.12.2017) Get short URL4161
A new report from a London think tank claims that China will totally overtake the US economy in size by 2032, with four other Asian nations – India, Japan, South Korea, and Indonesia – joining it in the top 10.
The Center for Economics and Business Research wrote that the 10 largest economies in the world in the year 2032 will be China at the top, followed by the US, India, Japan, Germany, Brazil, the UK, South Korea, France and Indonesia.
China’s healthy economic growth has captured the world’s attention since 2007. “China has maintained its growth resilience and gained reform momentum,” said John Litwack, World Bank lead economist for China, to ECNS in reference to China’s 6.8 percent gross domestic product growth in 2017. “The authorities have undertaken a host of policy and regulatory measures aimed at reducing macroeconomic imbalances and limiting financial risks without notable impact on growth.”
The Institute of Population and Labour Economics at the Chinese Academy of Social Sciences (CASS) also found that the “new” Chinese economy, companies and services based on the internet, grew at an astonishing average 16.1 percent between 2007 and 2017 — twice as fast as the overall Chinese economy.
Chinese economic growth has slowed to counter the excesses that come part and parcel with rapid economic growth: pollution, debt and income inequality. However, China more than doubled the US’ 2017 GDP growth of 3.2 percent.
Already, China has a higher real GDP than the US, but the US retains a comfortable lead of $7.4 billion in nominal GDP. But the Chinese economy is growing at high speed, so it’s only a matter of time before it outpaces the US.
Meanwhile, India is expected to overtake France and its former colonial overlord the United Kingdom in nominal GDP in 2018. By 2027, India will also outgrow Germany and Japan to become the third largest economy in the world.
Other newcomers to the top 10 will include South Korea (currently ranked 11th) and Indonesia (16th). Japan will drop from third to fourth, making five of the top 10 economies in the world Asian nations.
The nations expected to drop out of the top 10 are Canada and Italy, while Brazil is expected to climb from eighth to sixth. The Asian powers continue to industrialize and advance their economies while simultaneously making use of their large populations. The three largest European economies, France, Germany and the UK, are expected to remain in the second half of the pack.
Earlier in December, US President Donald Trump passed the Tax Cuts and Jobs Act (TCJA), a landmark piece of legislation that has been referred to as the largest tax reform in the US in 30 years. The bill is expected to see a major increase in the US deficit but also lead to higher GDP growth over the next 10 years.