While economies around the world have been struggling to grapple with the devastating impacts of the pandemic, one country has managed to avoid a 2020 recession and has even seen overall economic growth.
Largest Economy By 2028?
China’s strict and swift lockdown measures, as well as emergency relief measures for businesses, seem to have given the country an economic boost, with official figures showing an impressive 2.3% growth in China’s economy in 2020.
China is on track to take over the USA as the world’s biggest economy in 2028, which is five years sooner than predicted.
With such big changes taking place on the world economic stage, countries like India and China are starting to catch up with and overtake traditional economic giants. In 2000, China had just 3.6% of the world economy but in 2020 it had 17.8%.
As it becomes a bigger economic player, industries such as advanced manufacturing and technology have received targeted government intervention.
CEBR deputy chairman Douglas McWilliams said:
“They seem to be trying to have centralised control at one level, but quite a free market economy in other areas. And it’s the free market bit that’s helping them move forward particularly in areas like tech.”
The Chinese manufacturing sector also seems to have recovered quickly, with a 7.3% increase in industrial output and a much higher demand for Chinese exports in December fuelling increased growth in that sector too.
As the rest of the world struggles to maintain productivity levels, harsh lockdown measures have allowed China to strictly control the spread of the virus, and maintain economic output.
Though China’s economy took a big hit at the beginning of the outbreak, it has recovered much quicker than other countries. In fact, Chinese exports increased by 9.9% in September 2020 and imports also rose by 13.2%, according to official statistics.
The CEBR released its global economic league table in December, with China showing continued growth, especially compared to other major economies.
Recent forecasts have predicted that the Chinese economy could grow 5.7% every year until 2025 and if this continues, China will be become the largest economy in the world by 2028.