A United Kingdom-based think thank, Centre for Economic and Business Research (CEBR), said on Saturday China would overtake the United States to become the world’s largest economy by 2028, five years earlier than previously predicted.
CEBR said in a report that China’s “skilful” management of COVID-19 would boost its relative growth compared to the US and Europe in the coming years.
The think thank also tipped India to become the third-largest economy by 2030.
The BBC reports that CEBR releases its economic league table every year on December 26.
Although China was the first country hit by COVID-19, it controlled the virus through swift and extremely strict action, meaning it did not need to repeat economically paralysing lockdowns as European countries have done.
As a result, unlike other major economies, it has avoided an economic recession in 2020 and is in fact estimated to see a growth of 2 percent this year.
The US economy, by contrast, has been hit hard by the world’s worst COVID-19 epidemic in terms of sheer numbers. More than 330,000 people have died in the US and there have been some 18.5 million confirmed cases.
READ ALSO: China lashes out at Trump’s trade policy
However, the economic damage has been cushioned by monetary policy and a huge fiscal stimulus, but political disagreements over a new stimulus package could leave around 14 million Americans without unemployment benefit payments in the new year.
The report said: “For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China.
“The COVID-19 pandemic and the corresponding economic fallout have certainly tipped this rivalry in China’s favour.”
“After a strong post-pandemic rebound in 2021, the US economy will grow by about 1.9 percent annually from 2022-24 and then slow to 1.6 percent in the years after that.
“By contrast, the Chinese economy is tipped to grow by 5.7 percent annually until 2025, and 4.5 percent annually from 2026-2030.”
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