Financial Industry Solutions (IHS) recently issued a report that said China will overtake the United States as the largest economy in the world. That, the report said, will be realized in the next 10 years.
Quoted from page Dailymail, Monday, September 8, 2014, in the report referred to, an increase in the consumption of Chinese residents as much as three-fold in the next decade. Based on the IHS report, originally recorded increased consumption of $ 3.5 trillion to $ 10.5 trillion.
The high level of Chinese consumption will also trigger their GDP to $ 28.3 trillion. In fact, this figure reaching past the US’s GDP US $ 27.4 trillion when using current prices.
The US’s GDP today is still higher than China recorded the US $ 17.4 trillion. While China has a GDP of $ 10 trillion.
However, in the eyes of the experts it could have changed since the level of Chinese consumption of 7.7 percent per year.
While using the same method, the Center for Business and Economic Research predicts the new China can take over the title of the United States in the upcoming 2028.
“China’s economy is expected to return to offset faster growth in consumption, which will help domestic economic structure and growth in the Asia Pacific (APAC),” said IHS Chief Economist Asia, Rajiv Biswas.
China’s economy, said Biswas, will play a greater role as a key player in global trade and investment flows. If the predictions of the IHS right, then China will hold one-fifth of world GDP in 2025. That is, there will be an increase of up to 12 percent compared to this year.
The level of consumption of a high Chinese citizens will also assist countries in Southeast Asia. Because they also benefited from the increase in trade there.
IHS report is based only on nominal GDP does not accurately reflect the cost of living. However, other methods, purchasing power (PPP) focuses on the difference in currency values.
Although the PPP method calls the new China will take the title of the upcoming United States in 2019, but the Bamboo Curtain country can actually achieve the predicate in this year. Based on the report made by the World Bank, the Chinese economy has reached 87 percent of the size of the United States economy in 2011 ago.
Even so, experts warned that China still needs structural reforms to create a more sustainable level of long-term growth. Agency for International Monetary Fund (IMF) has advised the Chinese to target growth rate that is seven percent safer in 2015 Without structural reforms, growth could be slowed dramatically to 2.5 percent in 2030.
Besides China, other countries according to the IHS report that will experience rapid economic progress, namely India. Prediction IHS, Indian economy will beat Japan in the coming 2023. Meanwhile, in the same year, China’s consumer market will amount to three times greater than the share of the Japanese market.