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Economic reordering in the making?

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The latest report published by the British think-tank, the Centre for Economics and Business Research (CEBR), forecasts that the Chinese economy will overtake that of the United States in 2028, five years earlier than expected. This projection in its annual World Economic League Table is based largely on Beijing's "skilful handling" of the Covid-19 pandemic. CEBR also sees comprehensive power steadily tilting in China's favour. This aside, India pushing Britain down from fifth place in 2024 and pipping Japan for the No. 3 spot in the early 2030s are other key forecasts. While most of the report should not surprise those who watch global developments unfold, the improved forecast for China is particularly significant for Asia, and the world.

China's economy overtook that of Japan in nominal gross domestic product in 2010. Judged by purchasing power parity, the measure used by many economists, it already is the No. 1 economy, surpassing the US. While all this does not make China rich - at the end of the day the critical number for measuring wealth is per capita income - aggregated economic heft does matter and there is no gainsaying China's steady rise to global eminence in that regard. China is also moving swiftly to exceed targets on issues such as climate mitigation. All this, and President Xi Jinping's rise and consolidation of power, has required every nation to redo its sums on the China account.

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A version of this article appeared in the print edition of The Straits Times on December 29, 2020, with the headline Economic reordering in the making?. Subscribe