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China, India to be 1st & 3rd largest economies by 2050: Report

Discussion in 'World Economy' started by SpArK, Jan 12, 2011.

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  1. SpArK

    SpArK SorCeroR Staff Member ADMINISTRATOR

    Apr 1, 2010
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    China, India to be 1st & 3rd largest economies by 2050: Report

    China and India will be the largest and third-largest economies in the world by 2050, signalling a back to the pre-industrial revolution world order , with the US at number 2, conclude two influential reports from HSBC and PwC, respectively.

    India could overtake Japan as early as 2011, and US by 2050 and China will be bigger than US by 2020, PwC calculates, using purchasing power parity (PPP) which adjusts for price differences across economies to forecast GDP growth.

    India is projected to emerge as the fastest growing economy over this period according to PwC, given its younger demographic and lower base compared to China. 8165 usd billion, base 2000, pop1614 mn The conclusions may not seem startling, but both reports conclude that the pace of shift in global economic power from developed to emerging economies is picking up.

    “In many ways this renewed dominance of China and India, with their much larger populations, is a return to the historical norm prior to the Industrial Revolution of the late 18th and 19th centuries that caused a shift in global economic power to Western Europe and the US – this temporary shift in power is now going into reverse,†says the PwC report on the World in 2050. It’s not just China and India, HSBC finds that 19 of the 30 largest economies will be today’s emerging nations, and the emerging world will increase five times to be bigger than developed nations – the good news is that the next decade will see higher growth globally, at 3%, compared to 2% in the 2000s, says the HSBC report.

    Beyond Brics, HSBC finds that Mexico, Turkey, Indonesia, Egypt, Malaysia, Thailand, Colombia and Venezuela will enter the big league.

    The US and UK, with better demographic outlooks, are relatively successful at maintaining their positions, says the report. “But the small-population, ageing, rich economies in Europe are the big losers.

    Switzerland and the Netherlands slip down the grid significantly, and Sweden, Belgium, Austria, Norway and Denmark drop out of our Top 30 altogether,†finds HSBC. PwC, however, finds almost all of Europe dropping down the value chain, including the UK which drops to the 10th rank in its analysis.

    The EU as a region might just be able to maintain some level of global clout, but that’s only if they stick together. India’s share of global GDP is expected to rise to 13%, from its current share of just 2%, according to PwC analysis, and the E7 economies will be around 64% larger than the current G7 by then. There are caveats though. These economists project that the world will not really run out of resources, if there’s continuing investment in low-carbon fuels, but there will be enormous pressures on food and water resources.

    HSBC warns the biggest danger is that open borders that have delivered prosperity are closed, and says while the world has enjoyed a period of relative calm in the past, trade wars could lead to real wars. Bad political choices, and bad economic governance could easily upset the emerging market growth story.

    China, India to be 1st & 3rd largest economies by 2050: Report - The Economic Times
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