China will overtake the US to become the world’s biggest economy in 2028, according to a new report.
It is expected to have grown by two per cent in 2020 – making it the only major economy to have actually expanded this year. By contrast the US is estimated to have contracted by five per cent over the last 12 months.
“The pandemic has not affected all economies equally,” the CEBR said in its annual league table of global growth prospects.
“China, in particular, seems to have weathered the storm better than the western economies and as a result, we now see the Chinese economy overtaking the US in dollar terms in 2028, five years earlier than we had expected a year ago.”
It warned that the west must now look eastwards.
“The success of Asian economies in managing the consequences of the pandemic suggest that western economies should become less insular and should pay much more attention to what is going on in the east,” the report said. “Typically, we compare ourselves with other western economies and miss out on what often is best practice, especially in the rapidly growing economies in Asia.”
In a separate area of the research, the CEBR also predicted the UK would remain one of the world’s best performing economies over the next decade despite its departure from the EU. Indeed, it stressed that it expected Britain to steam away from historic rival France during the period.
“We expect the trend rate of growth for the UK to be four per cent annually from 2021-25 and 1.8 per cent annually from 2026-30,” the report said.
“The UK is forecast to be overtaken by India in 2024 but otherwise holds its place in the league table to 2025. By 2035, UK GDP in dollars is forecast to be 40 per cent cent more than that of France, its long-standing rival and neighbour.”