China to overtake US as world’s top economy in 2032 despite Washington hostilities, state think tank predicts

Report is based on prevailing assumptions in Beijing that China’s economic rise is unstoppable

Development Research Centre of the State Council suggests that feuds with United States will continue to intensify over the next five years

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The industrial sector’s share of China’s GDP could drop to 35 per cent by 2025, from 39 per cent in 2019, according to predictions in a new state think tank report. Photo: EPA-EFE

Published: 10:00pm, 2 Sep 2020Updated: 12:05am, 3 Sep 2020

China is expected to surpass the United States to become the world’s largest economy in a little more than a decade, despite escalating hostilities with Washington, a Beijing-based governmental think tank has forecast.

The prediction, made by researchers at the Development Research Centre (DRC) of the State Council, the Chinese government’s cabinet, reflects mainstream assumptions in Beijing about the success of the Chinese government’s new development strategy of focusing more on its domestic market, given the intensifying economic, technological and geopolitical rivalry with the United States.

The report also underlines a big assumption in China that the country’s economic rise is unstoppable.

Chinese President Xi Jinping reaffirmed on Monday that China must “speed up” the new “dual circulation” strategy he introduced in May, given that the external environment has become volatile and hostile.

According to the group of researchers led by Chen Changsheng, who oversees macroeconomic research at the government-run think tank, disputes between China and the US will intensify further in the next five years.

“It can’t be ruled out that the US will use all possible methods to contain China’s development, including imposing financial sanctions on Chinese companies by misusing its ‘long arm’ jurisdiction [to impose US law outside America’s borders], seizing China’s holdings of US Treasury securities … coercing other countries to impose technology embargoes on China, as well as excluding China from the [US] dollar payment system,” according to the report.

However, even those factors cannot stop China’s economic rise, the report suggested. The country’s share of the global economy will rise to 18.1 per cent in 2025 from 16.2 per cent in 2019, while the US share will drop to 21.9 per cent from 24.1 per cent in the same period, the researchers predicted.