China becoming the largest economy

China becoming the largest economy

currently being edited by Syuen

Description:

Over the next 50 years, Brazil, Russia, India and China—the BRICs economies—could become a much larger force in the world economy. Within the BRIC countries, China will become the most prominent becoming the largest economy in the world. Goldman Sachs has already predicted in 2005 that China will be the biggest economy in 2041 surpassing the United States. However more recent research from the Head of Asia research at ING Bank in Singapore is already predicting that if China continues it's average growth rate in the past 20 years, it will overtake the U.S in 20 years, this would be roughly 2030, 11 years earlier than the 2041 Goldman Sachs has predicted. The US will become the second largest economy, closely follwed by India.

Enablers:

1. Stable Macro Environment

2. Strong and Stable political institutions

3. Openess to trade and foreign direct investments

4. High levels of education

Inhibitors:

1. Unstable political environment, minority issues

2. Unhealthy financial institutions (Not commercial driven)

3. Working population decreasing (one child policy)

4. More demand than supply for metals, grains and fuel to support the economy

Paradigms:

1. Change of world power when China becomes the biggest economy

2. Increase need of more energy

3. Renminbi becoming the main currency instead of USD (change the oil barrel per price)

Timing:

2007: China's economy overtook Germany's economy, becoming the third largest economy

2015: China's economy will be bigger than Japan, becoming the second largest economy

2041: China's economy will be bigger than US, becoming the largest economy

Web Resources:

1. http://www2.goldmansachs.com/ideas/brics/book/99-dreaming.pdf

2. http://www.bloomberg.com/apps/news?pid=20601110&sid=a9P1peF6QeOg