Report Projects China to leave behind US by 2016

Posted on 25 Mar 2013 at 12:15pm

Report Projects China to leave behind US by 2016

According to a recent report by the Organization for Economic Co-operation and Development (OECD), China is on the way for a fourth successive decade of fast economic rise and will leave behind the United States as the world’s biggest economy in 2016 after taking into account price disparities.

The reports said that Beijing’s economy is set to grow by 8.5 percent in 2013 and more in 2014, with price rises and export demands the major short run risk factors that should average 8 percent in these 10 years at existing rates of investment and reform. The projection is conditional on China’s capability to carry on executing certain economic, financial, governance and management reforms.

“There is significant scope for further catch-up in China; China has a strong record with respect to several of the key factors for sustaining growth and is well positioned to emulate the record of earlier stellar Asian performers,” the OECD said in its survey of the world’s second-biggest economy, according to CNN.

Beijing’s existing GDP is formally $8.25 trillion, although it is predicted to be much bigger when accounted for price differences. China’s per capita GDP is $9,100 that grades the nation at a radically different 118th place in the world. It is pertinent to mention here that the United States is ranked 12th in the world when it comes to per capita GDP.

According to some economists, China’s GDP growth by the end of this decade will be around 5 percent. For the last three decades China’s average annual economic growth has been 10 percent.

“Recent OECD simulations suggest that China could maintain high, though gradually easing, growth during the current decade, averaging 8 percent in per capita terms,” the report said, according to Reuters.

Even though Chinese cities have grown rapidly, yet it has lagged behind in urbanization at 52.6 percent, which is lower than that of countries at parallel stages of development. Analysts think that transportation issues have become severe with average regular travel times in Beijing being 79 minutes, almost twice the OECD average.