The Bund, Shanghai’s most-famous tourist destination, overlooks the Huangpu River and the Lujiazui skyline. Photo by Gao Erqiang and Alywin Chew/China Daily/Asia News Network
BEIJING — Asian economies will witness significant growth in the next 15 years, according to a new analysis.
China is set to overtake the United States to become the world’s largest economy by 2032, according to the World Economic League Table, published annually by the Centre for Economics and Business Research, or CEBR, in London.
The table tracks the size of economies over the next 15 years.
It predicts that three of the top five global economies by 2033 will be Asian, with China in top position, India third and Japan fourth. The US will be second and Germany fifth.
Other Asian economies will rise during this period, with South Korea becoming the 10th-largest, Indonesia (12th), Thailand (21st), the Philippines (22nd), Bangladesh (24th) and Malaysia (25th), all making the top 25.
“Despite global uncertainty and tightening in US monetary policy, which have pushed down some of the emerging market currencies, the 21st century is still likely to be the Asian century,” said Douglas McWilliams, CEBR deputy chairman and founder.
China is now the world’s second-largest economy, while its per capita income is still only about one-fifth of the average in areas with high incomes.
With the US economy growing faster than expected, the stage at which China takes over top spot has been put back two years from 2030, which was forecast by the World Economic League Table in 2017.
The new analysis indicates that China’s Belt and Road Initiative could be an important growth driver. Infrastructure spending is set to increase from $11.5 billion, or 13.5 percent of global GDP last year, to $27.4 billion, or 15.5 percent, by 2032.
“We think the initiative will be seen as one of the world’s great transformational projects,” McWilliams said.
Singaporean academic Kishore Mahbubani said it is clear that Asia is on the ascendancy, with China’s economy growing at an average of 9.5 percent over the past three decades and India’s by 6.6 percent.
“For the past three decades, several Asian countries have done exceptionally well. There is no doubt that this momentum will continue,” he said.
David Morris, chair of the United Nations Asia Pacific Business Forum, agrees that Asia is now vitally important to the global economy.
“We are in the midst of the biggest global economic shift in memory, with East Asia now driving growth in the world economy,” he said.
The report also suggests that the United Kingdom could be hit hard by Brexit this year, with the chance of it losing its 5th place ranking to France.
But it concludes that even if the UK lost Scotland and Northern Ireland as a result of Brexit fallout, the new country, comprising just England and Wales, would overtake France by 2026. This is because it would have a more dynamic economy than that of France, which would still be handicapped by a bloated public sector and high taxes.
“There could be many benefits as well as costs from leaving the EU,” McWilliams said.
“The UK can move out of its comfort zone of trading with the EU and increase its trade with the world, including China.”