China will surpass the US and become the world’s biggest economy five years earlier than expected.
According to a report published by the Centre for Economic and Business Research (CEBR), The Asian countries “skilful handling and management of Covid-19 would boost its relative growth compared to the US and Europe in coming years.”
Although China was the first country hit by Covid-19, it controlled the disease 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 growth of 2% this year.
The US economy had been affected more by the Coronavirus than China as there have been over 330,000 deaths and 18.5 million confirmed cases.
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 says that after “a strong post-pandemic rebound in 2021”, the US economy will grow by about 1.9% annually from 2022-24 and then slow to 1.6% in the years after that.
By contrast, the Chinese economy is tipped to grow by 5.7% annually until 2025, and 4.5% annually from 2026-2030.
Also in its annual economic league table, India will become the third largest economy by 2030.