By: Tess Sommer
It seems to me that everyone is too preoccupied with the idea of China surpassing the United States as the world’s largest economy. With the way things are going, of course China will surpass the United States. The difference in population is evidence enough. China has an enormous production force behind it, so it is understandable that China is the world’s largest manufacturing country. But then again, you probably already knew that by all the tags you have saying “Made in China.” One cannot help but wonder, will any country ever surpass China? My guess and money is on India. Currently, China has the fastest growing economy at 7 percent this fiscal year. However, according to the Wall Street Journal, China’s economy is not growing at the 7 percent rate Chinese officials say. In fact, it is estimated that the country is growing at a rate more along the lines of 6 percent. This discrepancy may seem miniscule, but it has a big impact.
It means that production and investments within China are weak and not growing at the rate China reports to outside sources. Now, I do not want you to worry. China’s economy is fine. It’s just experiencing a little hiccup right now, but this delay could allow for other countries’ economies to grow – like India’s. According to Fortune magazine, the Indian economy will eventually surpass China. It predicts that India’s economy will grow at a rate of 8.1 percent compared to China’s intended 7 percent. In a sense, India is more productive than China, and if rates like this continue, there will be no mystery. Fortune magazine also mentions that India’s population will surpass China’s by 2028. Although India lags behind China, the population difference creates an absolute advantage for China. However, if India can surpass China in population, it may be able to use this to its advantage and gain the title of the fastest growing economy.
One thing that could hurt China is its one-child law. Although this law may benefit China now, it allows for countries like India to surpass it in population. As of now, there is no predominate law in India that controls population, but certain Indian states have passed a two-child policy allowing couples to have up to two children. This limits India to a certain extent, but if things continue as they are now, India’s population will surpass China’s and help the nation become more economically powerful.
However, before India can overcome China, it must first exceed the eight other countries ahead of itself, including the United States, Japan and Germany. Common sense tells us that this can happen: What goes up must come down, those on top eventually fall. Nothing lasts forever, etc. Currently, most of the countries with the largest economies have maintained their current status for quite some time. The United States has been the largest economy in the world for more than 140 years. But economies are organic and constantly changing. Therefore, it comes as no surprise when some economists argue that China has already surpassed the United States and has become the world’s largest economy.
China time on top will not last. Instead, India will rise and claim the title of the world’s largest economy for a longer period of time than China. But is everything set in stone? Like any economist might say, it depends. Nothing is certain; economist can only guess at the future, and predictions can be wrong. For example, many economists predicted that Japan would be the country to surpass the United States as the world’s largest economy before the 1990s, yet from 1991 to 2010, Japan’s economy contracted, contrary to economic reports.
One can only hope nothing like this will occur within budding countries like India that have bright futures. But risk is what makes economics so much fun. It will definitely be interesting to see how the global economy will change within the next year, and my suggestion is to keep your eye on India.