While China cautiously hopes for an improvement in ties with the US once Joe Biden steps into the White House next month, Beijing's economic trajectory appears to be pointing upward.
A prominent British economic think tank, the Centre for Economic and Business Research, has forecast China will overtake the US as the world's biggest economy by 2028, five years earlier than previously estimated.
CEBR has based this forecast on the contrasting recoveries from the impact of COVID-19 in both nations. CEBR mentioned the forecast in its annual report published on Saturday.
"For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China. The COVID-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour," Reuters quoted the CEBR report as saying.
The CEBR noted China's "skilful management of the pandemic" as well as the adverse economic impact of COVID-19 in the West meant China's relative economic performance had improved, Reuters reported.
"China looked set for average economic growth of 5.7 per cent a year from 2021-25 before slowing to 4.5 per cent a year from 2026-30. While the United States was likely to have a strong post-pandemic rebound in 2021, its growth would slow to 1.9 per cent a year between 2022 and 2024, and then to 1.6 per cent after that," Reuters reported.
Douglas McWilliams, the CEBR’s deputy chairman, was quoted by The Guardian as saying, “The big news in this forecast is the speed of growth of the Chinese economy. We expect it to become an upper-income economy during the current five-year plan period (2020-25). And we expect it to overtake the US a full five years earlier than we did a year ago. Other Asian economies are also shooting up the league table. One lesson for western policymakers, who have performed relatively badly during the pandemic, is that they need to pay much more attention to what is happening in Asia rather than simply looking at each other.”
India to be 3rd-largest economy
CEBR predicted Japan would remain the world's third-largest economy, in dollar terms, till the early 2030s, when it will be overtaken by India by 2035.
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The Donald Trump administration had repeatedly criticised China for not being transparent about the origins and early impact of COVID-19.
CEBR predicted Germany would be the fifth-largest economy by the early 2030s. “The United Kingdom, currently the fifth-biggest economy by the CEBR’s measure, would slip to sixth place from 2024. However, despite a hit in 2021 from its exit from the European Union’s single market, British GDP in dollars was forecast to be 23 per cent higher than France’s by 2035, helped by Britain’s lead in the increasingly important digital economy,” Reuters reported.