A stunning report that was issued by the Organization for Economic Cooperation and Development has stated that China is on course to overtake the U.S. economy a lot sooner than we had thought: by the year 2016. Last year, the economy in China grew by a whopping 7.8 percent. And according to the OECD report, the economy there is set to grow by 8.9 percent in 2014.
The analysis compared price shifts, inflation, worldwide economies, markets and many other factors when predicting that it is highly possible that Chinese economy becomes larger than the U.S. economy inside of the next three years. The primary factor, however, was investment spending, something China has been adamant about in recent years.
The one thing that’s really been holding China back is the state’s firm lockdown on trade and companies. The rampant monopolies in China, the counterfeiting epidemic and the lack of ability for real foreign competitiveness also play a strong role of doubt. Since 2005, leaders of this nation have promised to open the doors to foreign competition and clamp down on monopolies, a pledge that they still have yet to live up on.
Richard Herd, the chief author of the OECD’s report wrote: “What’s needed is to make these changes effective and really open up some of these sectors,” adding, “and really there has been no result.”
The World Bank concurs with Herd, stating that the country needs to tackle monopolies and ease state control over enterprise to truly grow and nourish its economy.
“China has weathered the global economic and financial crisis of the past five years better than virtually any OECD country and than many other emerging economies,” said the OECD. “It is well placed to enjoy a fourth decade of rapid catch-up and improving living standards.”