News+Politics November 9, 2012
The Balance Of Power: New Report Says China Will Overtake The U.S. & Become The World's Biggest Economy In Four Years

the-balance-of-power-new-report-says-china-will-overtake-the-us-and-become-the-worlds-biggest-economy-in-just-four-years-feature1.jpg

For all of its troubles over the past several years, the United States still has bragging rights as the world's biggest economy.

But even that might not last much longer.

Today, a leading international think tank said China will pass the U.S. in the next four years and take the number one spot.

The Organization for Economic Co-operation and Development says China's economy will be bigger than the combined economies of the Eurozone countries by the end of this year.

And it will overtake the U.S. by the end of 2016.

the-balance-of-power-new-report-says-china-will-overtake-the-us-and-become-the-worlds-biggest-economy-in-just-four-years-feature2.jpg India is likely to overtake Japan soon and is expected to pass the Eurozone in about 20 years.

But that's not all.

The OECD says the world is in for a big shift in the balance of economic power over the next 10 to 15 years - largely because of China and India.

By 2025, the OECD says the combined GDP of China and India will be bigger than all of the G7 countries combined (ie: the U.S., Britain, Germany, Japan, France, Italy and Canada).

As well, people in the developing world are expected to see their incomes quadruple over the next 50 years. In China and India, people are expected to make 7 times as much money as they make now.

The OECD has put together a really good, simple video outlining how it expects the global economy to change.

Have a look. It'll make you that much smarter, when you're talking with your family and friends.

A lot of it comes down to productivity.

Countries such as China, India, Indonesia, Brazil and those in Eastern Europe are all projected to grow faster and catch up with more developed economies.

But here's a key point.

In spite of the gains, it doesn't mean day to day life will be the same in developing countries as in the West.

In fact, the OECD says living standards in the developing world will remain well below those in the West, particularly the U.S. and Canada.

Anywhere from 40-75% lower than western countries enjoy.

The global GDP is projected to grow by 3% a year over the next 50 years. But the report says there will be large gaps between countries and regions.

It says those gaps could hurt overall growth.

All of this is part of a new report by the OECD called 'Looking to 2060: Long-Term Global Growth Prospects'.

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