CHINA and India would be the largest and third-largest economies in the world by 2050, signaling a back to the pre-industrial revolution world order, with the United States at No. 2, concluded two influential reports from HSBC and PwC, respectively.
India could overtake Japan as early as 2011, and the United States by 2050 and China would be bigger than the United States by 2020, PwC calculated, using purchasing power parity (PPP) which adjusts for price differences across economies to forecast GDP growth.
India is projected to emerge as the fastest growing economy over this period, according to PwC, given its younger demographic and lower base compared to China.
The conclusions may not seem startling, but both reports concluded that the pace of shift in global economic power from developed to emerging economies was picking up.
In many ways this renewed dominance of China and India, with their much larger populations, is a return to the historical norm prior to the Industrial Revolution of the late 18th and 19th centuries that caused a shift in global economic power to Western Europe and the United States this temporary shift in power is now going into reverse, said the PwC report on the World in 2050.
It was not just China and India, HSBC found that 19 of the 30 largest economies would be today s emerging nations, and the emerging world would increase five times to be bigger than developed nations the good news was that the next decade would see higher growth globally, at 3 percent, compared with 2 percent in the 2000s, said the HSBC report.
Beyond Brics, HSBC found that Mexico, Turkey, Indonesia, Egypt, Malaysia, Thailand, Colombia and Venezuela would enter the big league. The United States and United Kingdom, with better demographic outlooks, were relatively successful at maintaining their positions, said the report.
But the small-population, ageing, rich economies in Europe are the big losers. Switzerland and the Netherlands slip down the grid significantly, and Sweden, Belgium, Austria, Norway and Denmark drop out of our Top 30 altogether, HSBC said. PwC, however, found almost all of Europe dropping down the value chain, including the United Kingdom which would drop to the 10th rank in its analysis.
(SD-Agencies)
