Forecasts suggest that China will take over the United States and become the world’s largest economy in less than a decade.
The Asian country’s gross domestic product (GDP) is expected to expand 8.2% this year, say economists consulted by Bloomberg. According to the forecasts, China’s growth should exceed its peers, as it already happened in 2020. In fact, last year, China was the only nation, among the major economies, to avoid a contraction.
For Homi Kharas, deputy director of the development program and global economy of the Brookings research center (USA), China should become the largest economy in the world by 2028.
Two years faster than the specialist had previously estimated, the media reported.
Exports from the Asian country grew last year by 3.6%, to $2.59 trillion, while imports fell by 1.1%, to $2.06 trillion, resulting in a trade surplus of $535 billion.
China, in addition, probably regained the title of the world’s leading destination for foreign investment, which it lost to the United States in 2015, Bloomberg detailed. Foreign investment in the Asian country reached more than $129.5 billion until November 2020, slightly above the previous year.
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After the tariff war with the US, China is deepening economic ties with Asian and European nations. The country also relies on domestic consumption to drive its next phase of growth. Already in the first days of 2021, Chinese President Xi Jinping said that “time and situation” were on the side of the country in this new year.
The COVID-19 pandemic could help China “solidify its position in the global economy,” said Ka Zeng, director of Asian studies at the University of Arkansas (USA). The expert believes that European and US companies are likely to turn to China because of the country’s potential to be “the only great source of growth in the post-pandemic world.”
“We have seen wave after wave of the pandemic hitting different markets. And really, the only market where we have seen a continuous trajectory in terms of handling the virus has been China,” Nike CFO Matthew Friend told the outlet.