I recently read in The Guardian an article by enthusiastic orientalist Martin Jacques in which he says that The Economist has just predicted that China’s GDP, measured in nominal dollars, will will be the world’s largest by 2018. Earlier estimates, he says had China becoming the largest economy in the world by 2027
I have always been a little skeptical about the 2027 claim, not that it is implausible, let alone impossible. It is just that given how much we would have to assume about the sustainability of Chinese growth, about the likelihood of current GDP numbers not having been vastly inflated by an over-investment boom, and about the instable range of political outcomes, it seemed to me to be a prediction about as valuable as the world-beating predictions about the USSR in the 1960s or Japan in the 1980s.
Still, this 2018 prediction deserves I think more than a little questioning — it requires that nominal Chinese GDP growth in dollars outpace nominal US GDP growth by 12% a year. I know that in the past The Economist has tended to be a little less skeptical than some others have been about the sources and components of the Chinese growth miracle (not always — different writers at The Economist seem to have very divergent opinions on the subject), but this is a pretty aggressive prediction, more in line with what I would expect from an investment bank, or from a consulting company that helps foreigners access the Chinese consumer market.
I believe some people from The Economist do read my blogs from time to time and so I am wondering whether we could set up a friendly bet — not for too large stakes, please, since my resources are limited, but just so that we can both keep up a sporting interest in the economic news over the next few years. I would like to bet that by the end of 2018 China will not be the largest economy in the world.
If I win, perhaps The Economist could invite a very cool underground Chinese band of my choice to perform at their next big conference, whereas if I lose I could buy four-year subscriptions (student rates, please) to a group of Peking University freshmen. Everybody would end up feeling pretty pleased with themselves no matter who wins, right? So?
33 Responses to “The Largest Economy in the World in 2018 – I Would Like to Make a Bet with The Economist”
bethkirby • March 28th, 2012 at 1:13 pm
I like this bet, I hope the Economist goes for it.
Beth
Monika • March 28th, 2012 at 3:41 pm
Keep my eye on the bet……………….LOL…..
Dulan • April 2nd, 2012 at 7:19 pm
Great bet.
FREAKONOMIST • May 14th, 2012 at 1:17 am
while you are busy thinking whether china will grow or not , perhaps you might question the sustainability of the US economy itself…..after the last recession and the mounting debt of the US
china just needs to keep its pace. the US might as well fall from grace just by itself.
kietgene • May 18th, 2012 at 6:18 pm
India will soon see the downturn in next 1 or 2 years .
The politics are doing nothing either be India shining or dooming , they are fooling poor for petty votes and looting the public money so when the recession comes , they still can afford luxury.
The market cycle has been 1992-2000-2008-2016 ????
side effects • July 23rd, 2012 at 11:15 am
Still, this 2018 prediction deserves I think more than a little questioning — it requires that nominal Chinese GDP growth in dollars outpace nominal US GDP growth by 12% a year
roof walkway • July 24th, 2012 at 5:00 am
I have always been a little skeptical about the 2027 claim, not that it is implausible, let alone impossible.
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