In 2003 analysts at Goldman Sachs caused a stir when they predicted that the mainland would overtake the United States to become the world's largest economy soon after 2040. Now new research published by the US National Bureau of Economic Research goes even further, forecasting that by 2040, the mainland economy will be twice as big as the United States, the core European Union countries and Japan - put together.
And the mainland will not just be big, it will also be rich. By 2040, according to the research report, per capita income in the mainland will be US$85,000, measured in terms of the purchasing power of year 2000 US dollars. That is more than twice the forecast for the European Union. As the report declares; 'China is forecasted to go from a poor country in 2000 to a super-rich country in 2040.'
By then the world's economic balance will have shifted fundamentally towards Asia, according to the report's author Robert Fogel, director of the Center for Population Economics at the University of Chicago's Graduate School of Business. He predicts that by 2040, the economies of both India and a bloc comprising Singapore, Malaysia, Indonesia, Thailand, South Korea and Taiwan will be almost as large as that of the US.
Together Asian countries will make up two-thirds of the world's gross domestic product, with the mainland alone making up 40 per cent, compared with just 11 per cent in 2000.
Meanwhile both the European Union and Japan will decline drastically in economic importance. The share of the EU's core 15 countries in the global economy will drop to a measly 5 per cent from 21 per cent in 2000. Japan's share will fall to 2 per cent from 8 per cent.
These are bold forecasts. Professor Fogel predicts that by 2040, the mainland's GDP will be a massive US$124 trillion. To put that into perspective, that is nearly three times the world's entire economic output in 2000, and more than 12 times US GDP for that year. To realise that forecast the mainland will have to grow at an average 8.3 per cent annual rate for the whole period between 2000 and 2040.