China will overtake the United States to become the world’s largest economy in 2028, five years earlier than previously planned, according to a report.
The UK-based Center for Business and Economic Research (CEBR) said China’s “skillful” management of Covid-19 would fuel its relative growth compared to the United States and Europe in the coming years.
Meanwhile, India is forecast to become the third largest economy by 2030.
The CEBR publishes its economic leaderboard every year on December 26.
Although China was the first country affected by Covid-19, it controlled the disease through swift and extremely strict action, meaning it did not need to repeat economically crippling lockdowns as European countries have done.
As a result, unlike other major economies, it has avoided an economic recession in 2020 and is, in fact, estimated to see growth of 2% this year.
The US economy, by contrast, has been hit hard by the world’s worst coronavirus epidemic in terms of numbers. More than 330,000 people have died in the United States and some 18.5 million cases have been confirmed.
The economic damage has been cushioned by monetary policy and a massive fiscal stimulus, but political disagreements over a new stimulus package could leave some 14 million Americans without unemployment benefit payments in the new year.
“For some time, a dominant theme of the world economy has been the economic and soft power struggle between the United States and China,” says the CEBR report. “The Covid-19 pandemic and the corresponding economic consequences have certainly tilted this rivalry in China’s favor.”
The report says that after “a strong post-pandemic rebound in 2021,” the US economy will grow about 1.9% annually between 2022 and 24 and then slow to 1.6% in subsequent years. .
In contrast, the Chinese economy is expected to grow 5.7% annually until 2025 and 4.5% annually from 2026-2030.
China’s share of the world economy has risen from just 3.6% in 2000 to 17.8% today, and the country will become a “high-income economy” by 2023, according to the report.
But the average Chinese person will remain much poorer financially than the average American even after China becomes the world’s largest economy, given that China’s population is four times larger.