When Will China's Economy Become Larger Than That of the United States?
Earlier this week it was revealed that China had very likely passed Japan to become the second largest economy in the world.
This was originally expected to take place in 2010, but thanks to higher-than-expected economic growth for the Chinese and a rapidly shrinking Japanese economy, China very likely became #2 in 2009.
This leads to the question - when will China pass the United States to become the largest economy in the world?
The idea of the United States not possessing the world's largest economy may seem hard for some people to comprehend, but it's coming. Depending on your current age, there is a very good chance that the passing of the torch will take place sometime during your lifetime.
Based on 2008 numbers, the United States had a GDP of approximately $14.2-$14.4 trillion dollars, while China had a GDP (Gross Domestic Product) of approximately $4.32 trillion dollars.
This gap will shrink in 2009 due to continued growth in China and the lingering effects of a recession in the United States.
So, when will China finally overtake the United States, giving China's rapid growth and the sputtering economy of the United States?
According to some 2007 projections from Goldman Sachs, China should have a larger economy than the United States sometime between 2025-2030.
In 2025, Goldman Sachs projects that the United States will have a GDP of approximately $20 trillion dollars. China, on the other hand, will have a GDP of approximately $18.4 trillion dollars.
Sometime between 2025-2030, Goldman Sachs figures that China will surge past the United States. By 2030, the firm projects that China will have a GDP of approximately $25.6 trillion dollars, while the US is expected to have a GDP of $22.8 trillion dollars.
By 2050, the gap is expected to be even greater, with China expected to have a GDP of over $70 trillion dollars, which would be nearly twice as large as the $38.5 trillion dollar GDP of the United States.
Now, some people take issue with some of the projected growth targets for China - however, I'm just posting numbers from Goldman Sachs. It can be kind of hard to wrap your head around the fact that the Chinese economy is expected to grow from about $5 trillion dollars to over $70 trillion dollars in just forty years, but that is what Goldman Sachs is currently projecting.
It should be interesting to see when, in fact, China does pass the United States to become the world's largest economy.
Source: Wikipedia.org - BRIC
Filed under: General Market News