BEIJING: China is on course to overtake the euro area in the size of its economy this year.
China’s gross domestic product is forecast to reach about $13.2 trillion in 2018, beating the $12.8 trillion combined total of the 19 countries that use the euro, according to data compiled by Bloomberg. In 2017, the euro cohort edged China by less than $200 billion.
“It’ll overtake and then persist,” said David Mann, Singapore-based Global Chief Economist for Standard Chartered Bank. “It’s a function of the economic system, institutional infrastructure, education and hard infrastructure — all of which have been moving in Asia’s favor.”
Asia — including powerhouses Japan and India as well fast-emerging emerging nations such as the Philippines and Indonesia — already crowded out the combined economies of North and South America in 2016, according to data compiled by Bloomberg. And the faster average growth pace in Asia is set to be a boon to that yawning gap for many years.
China’s rapid re-emergence as an economic powerhouse — remember it used to be the world’s largest economy in the 1800s — has enormous implications,” said Rob Subbaraman, Head of Emerging Market Economics at Nomura Holdings Inc. in Singapore.
“The impact of China on global financial markets and commodities is no longer trivial. But its economic size also brings economic tensions in terms of market share competition in trade and investment” as well as foreign policy tensions, according to Subbaraman.