A year ago a respected Tokyo-based think tank, the Japan Center for Economic Research (JCER), alarmed observers in the West by forecasting that China's economy will surpass that of the United States by 2029, or less than a decade out. But the same think tank this month issued greatly revised figures, saying this is now expected to happen later than previously thought - in 2033 and not 2029, according to the updated forecast.
JCER concluded that China is damaging its growth potential in its recent clamp down on big tech and other major industries, including among other things its ambitious but controversial decarbonization drive as it tries to present itself a 'team player' jumping on the West's climate change agenda band wagon, racking up more debt in the process, and there's also looming danger of bankruptcy for real estate giants - with of course deeply troubled Evergrande being of foremost looming concern.
As summarized in Nikkei Asia, significant falling investment is expected given the centralized Communist-run country's "stricter financial regulations aimed at curbing excessive investment in real estate."
"The latest projection also factors in the US's rapid economic recovery this year, helped by a massive stimulus package pushed through Congress by President Joe Biden's administration,” Nikkei added based on the JCER findings.
Further according to regional media commenting on the Japanese think tank figures, "Now the change is set to take place when the economies of the two countries reach US$35 billion each. Currently, the US GDP is around US$23 trillion while that of China tops US$16 trillion."
“The size of China's economy is not expected to surpass that of the U.S. until 2033, rather than 2029 as predicted a year ago by JCER, whose latest forecast says Beijing is damaging the country's growth potential.”— CSIS Economics (@CSIS_Econ) December 15, 2021
Read @NikkeiAsia: https://t.co/xzlcafUZgU
Meanwhile, days ago the World Bank weighed in on China's near future outlook saying it expects China's economic growth to stall in 2022. According to the World Bank forecast out on Wednesday:
The World Bank has cut its forecasts for China's economic growth this year and next, as the world's second largest economy faces mounting headwinds from the new Omicron variant to a severe property sector downturn.
The bank now expects China's GDP to expand 8% in 2021 compared with a year ago — that's lower than its previous forecasts. (In October, the World Bank expected China to grow 8.1% this year. In June, it projected a growth of 8.5%.)
It also cut its 2022 forecast from 5.4% to 5.1%, which would mark the second slowest pace of growth for China since 1990 — when the country's economy increased 3.9% following international sanctions related to the 1989 Tiananmen Square massacre. China's economy grew 2.2% in 2020.
Thus ultimately China's ambition of fast becoming the world's number one economy is likely to take a little longer. The full Nikkei Asia report can be accessed here, and JCER's report (in Japanese) here.