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China to surpass US as No 1 economy in 20 yrs

China will surpass the United States as the largest economy in one to two decades, according to a Xinhua report carried online by People Daily.

The report quoted Chinese economist, Qian Yingyi, a well-known economist in China and dean of the School of Economics and Management (SEM) of Tsinghua University who predicted China would become the world's largest economy "almost surely before 2020 in terms of purchasing power parity (PPP)."

Qian made the remarks at the 16th World Congress of the International Economic Association (IEA) held at Tsinghua University -- where world renowned economists including Joseph E. Stiglitz, Eric Maskin, Masahiko Aoki and Wu Jinglian, Lin Yifu gathered for the five-day congress.

In 2009, China's economy was 35% of the United States -- about USD$4.9 trillion versus $14 trillion -- at the exchange rate at that time.

"If the real growth rate difference between China and the United States remains at least 5% and the yuan appreciates at an annual rate of at least 2% relative to the US dollar, then China will overtake the United States in less than 16 years or before 2025," Qian was quoted saying.

China became the second largest economy in the world in 2010.

Its annual rate of economic growth has been above 9% on average over the past 32 years.

According to Qian, China's economic growth was supported by a number of factors including macroeconomic stability, a high savings rate, a flexible labour market and opening up policies.

Qian said however China’s per capital income would still only be less than one quarter of the US by then. -- Source: People Daily