China’s economy will overtake that of the United States by 2028, five years earlier than previously forecast, because of the two nations’s different policies on the coronavirus disease 2019 (Covid-19), a British economic think tank said Saturday.
The World Economic League Table, released by the London-based Centre for Economics and Business Research, said China’s quick and forceful handling of the pandemic, which first broke out in Wuhan in 2019, resulted in less economic damage in 2020, leading to a head start in recovery.
China reported 23 active cases of Covid-19 on Dec. 19. The country has reported a total of 95,460 cases with 4,770 deaths since the pandemic began, according to the online tracker at the John Hopkins University.
The United States has been harmed economically by the Covid-19 pandemic, the report said. The United States has the highest number of Covid-19 cases and deaths worldwide at over 18.7 million cases and over 330,000 deaths, according to global trackers.
“China is estimated to be likely to have positive GDP (gross domestic product) growth of 2 percent in 2020, whereas other major economies are expected to have negative growth for the year,” the report said.
“The skillful management of the pandemic and the hits to long term growth in the West mean that China’s relative economic performance has improved. We now think that the Chinese economy in dollar terms will overtake the US economy in 2028, a full five years earlier than we thought last year,” it added.
The United States is predicted to undergo “a strong post-pandemic rebound in 2021,” the report said. The US economy will grow about 1.9 percent annually and then slow to 1.6 percent in the years to follow.
In contrast, the report predicts the trend rate of growth for China to be 5.7 percent annually from 2021-25 and 4.5 percent annually from 2026-30, slowing to 3.9 percent annually from 2031-35.
The economic weight of China, with a population of 1.44 billion people, has risen to 17.8 percent of the world’s economy from just 3.6 percent in 2000. China is poised to become a “high-income economy” by 2023, with a median income of $14,406, the report says. But the average Chinese person will still remain poorer than the average person in the United States. The US median individual income was $35,977 in 2019, according to the Federal Reserve Bank of St. Louis’s Economic Data.
Economic stimulus packages and consumer spending were poised to reboot the US economy in 2021, but “political disagreements over the continuation of the measures could see the assistance to many businesses and individuals cut off in early 2021,” the report said.
Meanwhile, India is expected to become the world’s third-largest economy by 2030, overtaking Britain in 2024, Germany by 2027 and Japan by 2030, the report said. CURRENTPH