A new report by global information provider IHS Inc. predicts that China will surpass the United States as the world’s largest economy by 2024.
The country is expected to restructure their economy significantly over the next decade in order to encourage rapid growth and consumer spending. If China’s consumer spending grows at an annual rate of 7.7% over the next decade, as is expected, the country’s nominal GDP will be at $28.25 trillion by 2024. The United States, meanwhile, is expected to have nominal GDP of $27.32 trillion in 2024.
“Over the next 10 years, China’s economy is expected to rebalance toward more rapid growth in consumption, which will help the structure of the domestic economy,” said Rajiv Biswas, IHS chief Asia economist. “China's economy will play an even bigger role as a key driver of global trade and investment flows.”
China’s consumer spending is expected to triple over the next decade from $3.5 to $10.5 trillion. Currently, China holds about 12% of the world’s GDP. If the country’s economy grows as expected, they will hold roughly 20% of the world’s GDP in 2024.
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The United States economy is predicted to grow significantly over the next decade as well, but not fast enough to keep pace with China’s predicted boom. The United States current nominal GDP of $17 trillion is expected to grow to $27.32 trillion by 2024, which is a growth rate of about $1 trillion annually. China’s predicted increase from $10 to $28.25 trillion nominal GDP over the same time equals a growth rate of $1.8 trillion annually.
Here, courtesy of MailOnline, is a graph comparing the expected growth rates of the two countries: