According to a PricewaterhouseCooper report issued on Tuesday, it is projected that in 2018 China will pass the United States as the world’s largest economy based on purchasing power parity (PPP).
The global financial crisis is speeding up the transition in economic power to emerging countries. In August 2010, China replaced Japan to move into the number two position.
PwC’s report also mentioned that the E7 emerging economies comprised of China, India, Brazil, Russia, Mexico, Indonesia and Turkey will very likely overtake the GDPs of the G7 economies before 2020.
Population size is one of the main contributing factors to the emerging market growth in nations such as China and India. However, China’s economy is expected to begin to peak by 2020, primarily due to demographic constraints that are a direct result of its one-child policy, which will eventually start to decrease the size of its workforce.
The E7 emerging economies are leading the world out of the global recession caused by the financial crisis in developed nations and will become more and more a economic powerhouse.