The Voice of Russia:China to become world's biggest economy

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The Voice of Russia:China to become world's biggest economy
Maria Frolova
Jan 18, 2013 15:53 Moscow Time

Those who are strong today will lose their strength. The US will yield to China in the economic leadership in 2017. Such is the forecast made by experts of the PricewaterhouseCoopers (PwC) consulting services.

They also say that this will not be the final step in the re-arrangement of forces in the world economy and that less than in 40 years Russia will play one of main roles while Europe’s largest economies will be lagging behind.

The PwC experts forsee that by 2050 three leading economies will be China, the USA and India. Thus, the USA will yield the palm to the Chinese and that India will move to the third from the tenth place. The size of the future leader’s GDP, meaning China, will be about 54 trillion dollars. Just to compare: today it is under 6 trillion dollars. Executive Secretary of the Russian-Chinese Chamber Sergei Sanakoyev also says that China will be giant No. 1 in the world in the future. He says:

"The nation is working which means that it is producing goods. This is a very important factor of growth. Of course, under the conditions of the world financial crisis, when the demand for Chinese goods dropped around the world, had a bad impact on the Chinese economy. However, quick measures on the reorientation towards domestic demand and a flexible credit policy have enabled China to maintain average yearly economic growth rates within the 7 to 10 per cent limits. It is absolutely clear that it is enough for becoming the world’s economy No. 1 by 2017."

Experts mention certain risks as well. One of them is an increase in the share of city dwellers. Hence, the issue dealing with the growth of food prices and the cost of work force is becoming urgent enough. A hike in both indices will do damage to the competitiveness of Chinese goods. The Chinese authorities are doing their utmost to prevent this.

Meanwhile, Russia’s government reports about economic victories. Russia’s GDP per capita has doubled since 1999, and the unemployment rate in this country was only 5.4 per cent in the end of the year which is very low according to the world standards. Experts from PricewaterhouseCoopers say that Russia’s GDP will increase by many times to reach 8 trillion dollars by 2050. Thus, Russia will rank sixth among the world’s economies, outstripping Germany, France, and Britain and coming close to Japan. This is possible, Director of the Institute of International Business at the National Research University - Higher School of Economics (HSE) – Natalia Karpova says.

"Russia and China - two superpowers of the future – are on the rise, and should serious contradictions or cataclysms be non-existent, they will develop faster than all the other countries."

The industrialized countries got the hardest hit by the current crisis because all of them relied on excessive loans to stimulate their growth, experts say. Therefore, the industrial growth of the developing markets not burdened with debts will become logical in the future. Especially that of the countries of raw materials – such as Russia and China.