China Could Leapfrog US As Top Economy By 2037, But Another Asian Powerhouse Could Reap 'Demographic Dividend'

As per a recent report from the Centre for Economics and Business Research (CEBR), the U.S., China, and India could be seen alternating in their positions as leaders of the global economy throughout this century.

What Happened: The CEBR’s study, reported by CNBC, projects that China may rise to become the world’s top economy by GDP as soon as 2037. Besides China, the report also forecasts strong growth for other countries, particularly India.

CEBR’s Chief Executive, Nina Skero, emphasized that being the largest economy does not always mean having superior living standards.

However, Mariana Mazzucato, an economics professor at University College London, argues that a large, rapidly expanding GDP could be a sign of a country’s military strength, economic clout, and global relevance. She also stressed that global challenges in health, climate, digital technology, and AI need to be addressed for GDP rankings to hold any significance.

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In 2023, China and India strengthened their diplomatic ties with the U.S. But China’s business confidence is waning, leading to increased government stimulus spending.

The CEBR had earlier predicted that China would surpass the U.S. economy by 2028. Meanwhile, population growth in both China and the U.S. has plateaued in the 21st century.

Conversely, India could benefit from a “demographic dividend” due to a rising working-age population, according to Rajiv Biswas, Asia-Pacific chief economist at S&P Global Market Intelligence.

Why It Matters: Despite the economic slowdown, experts believe that investing in China still presents substantial advantages as its economy, while slowing, still outpaced the U.S. last year. China also continues to lead in crucial technologies like artificial intelligence and quantum computing despite U.S.-led restrictions.

However, the fear of former U.S. President Donald Trump‘s potential re-election has led to anxiety among Chinese investors and a struggling economy. Further, an 87% drop in foreign investment in China’s stock market in 2023 has raised questions about its economic growth promises.

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