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China’s Economy Will Overtake US ‘By 2028’ Because Of Coronavirus

by : Charlie Cocksedge on : 27 Dec 2020 12:48
China's Economy Will Overtake US 'By 2028' Because Of CoronavirusPA

China’s economic growth looks set to overtake the US sooner than expected, in part because of the country’s ‘skilful’ management of the COVID-19 pandemic.

According to the Centre for Economics and Business Research (CEBR), China is on track to become the world’s largest economy by 2028, five years earlier than predicted, while India is thought to become the world’s third largest economy by 2030.

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While many European countries experienced multiple lockdowns, China controlled the outbreak of coronavirus quickly and with strictly upheld actions, despite being the first country hit by the virus. Because of this, the country avoided an economic recession and is predicted to see a growth of 2% this year.

China's Economy Will Overtake US 'By 2028' Because Of CoronavirusPA

The CEBR releases its economic league table every Boxing Day, BBC News reports.

So far, China has reported more than 95,000 cases of coronavirus, while more than 4,700 people have died, according to figures from Johns Hopkins. In stark contrast, the USA has reported 19 million cases and 332,000 COVID-related deaths. As a result, the US economy has been hit hard. Despite initial policy and fiscal stimulus packages aiding the country, recent disagreements – and Trump’s failure to sign an economic relief bill into law – could leave 14 million people without unemployment benefit payments in the new year.

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As the CEBR reports states: ‘For some time, an overarching theme of global economics has been the economic and soft power struggle between the United States and China. The COVID-19 pandemic and corresponding economic fallout have certainly tipped this rivalry in China’s favour.’

The economic relief bill was worth $900 billion, and was approved by Congress after months of negotiations. However, Trump refused to sign the bill into law because, he said, he wanted to give bigger one-off payments – $2,000 rather than the agreed $600 – to those earning less than $75,000 a year. However, Republicans in Congress refused to agree to the change.

In order to stop a partial government shutdown, due to begin on Tuesday, December 29, legislators could pass a stopgap bill, though this would not include coronavirus aid, and Trump would still have to sign it for it to have any effect.

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According to the CEBR report, the US economy is set for a ‘strong post-pandemic rebound in 2021,’ which will see growth of around 1.9% a year from 2022 to 2024, slowing to 1.6% growth after that.

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On the other hand, China’s economy is set to grow by 5.7% a year until 2025, and 4.5% from 2026 to 2030.

The country is not only benefitting from its strict pandemic control, but implementing new, more stringent policies and targeting certain industries.

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CEBR deputy chairman Douglas McWilliams told BBC News China seems ‘to be trying to have centralised control at one level, but quite a free market economy in other areas,’ adding: ‘And it’s the free market bit that’s helping them move forward particularly in areas like tech.’

However, in financial terms, it’s also thought the average Chinese person will remain poorer than the average American, even after China becomes the world’s biggest economy, due to China’s population being four times bigger.

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Charlie Cocksedge

Charlie Cocksedge is a journalist and sub-editor at UNILAD. He graduated from the University of Manchester with an MA in Creative Writing, where he learnt how to write in the third person, before getting his NCTJ. His work has also appeared in such places as The Guardian, PN Review and the bin.

Topics: News, America, China, Coronavirus, Donald Trump, Economy, Now, USA

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BBC News
  1. BBC News

    Chinese economy to overtake US 'by 2028' due to Covid