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China will be World’s Largest Economy by 2016

Posted on 22. Mar, 2013 by in Business, Business Featured

A new report released by the Organization for Economic Cooperation and Development says that China will continue its rapid growth for a four straight decade

A new report released by the Organization for Economic Cooperation and Development says that China will continue its rapid growth for a four straight decade

March 22, 2013 - A new report released by the Organization for Economic Cooperation and Development says that China will continue its rapid growth for a four straight decade and will overtake the United States as the biggest economy in the world by 2016.
Last year, China’s growth dropped to 7.8%, its lowest in over a decade, but this year it is on track to rebound to over 8.5% and nearly 9% in 2014, said the report. It has been forecasted that China would have an average growth of 8% in terms of per capita during this decade, provided the government is able to implement a number of regulatory, financial and economic reforms.

China’s record for sustaining growth has been good and is positioned well to emulate the stellar performers from Asia of the past. The report by the OECD noted that there would be a gradual ebb of growth in China as it catches up to other advanced economics. However, the report’s forecast is even ahead of the official target set by the Chinese government of 7% yearly growth for a five-year period that ends in 2015.

The economy in China is set to surpass the U.S. during 2016 in the latest report, which is online with previous estimates from the OECD.

Risks to the economic outlook were mentioned such as rising inflation, a weaker global economy, a risky financial system, an ageing population and inequality.

However, the reported noted that the Chinese government had done a great deal to cut reliance on the demand from outside the country and that rebalancing domestically was under way, with consumption becoming a bigger driver of the country’s growth than investment.

Recommended broad range reforms included a push to focus on building cities that were much more productive and larger. Chinese cities are expanding quickly but the rate of urbanization is below that of countries that have similar development levels.

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