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, China is already increasingly influencing the countries in the "new" emerging markets to secure their need for metals, grains, energy sources. China becoming more powerfull in international organizations like WTO, United Nations etc)
2. By becoming the biggest economy China will increasingly need to develop and growth their energy needs in order to keep keep up with the economic growth
3. Renminbi becoming the main currency instead of USD, increasing influence of RMB in the global economy. (e.g. Price quotes of oil will be in RMB instead of USD)
4. China will become more active in climate change talks. China will push the current developed countries to comply to the Kyoto Protocol. China is also part of the Asia Partnership on Clean Development on Climate (APP) which will become more important in this new era
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