The leaders of the world's biggest emerging powers, Brazil, Russia, India and China meet this week for their first formal summit, seeking ways to reshape the global financial system after the worst economic crisis in decades.
Leaders of the so-called BRIC nations will discuss ways and ideas for a new reserve currency to reduce dependency on the U.S. dollar.
BRIC countries account for 15 percent of the $60.7 trillion global economy, but Goldman Sachs predicts that in 20 years time, the four countries could together dwarf the G7 and become the world's largest economy.
Meanwhile, China's economy will overtake the United States in total size, said the Goldman Sachs.
Goldman is raising China's GDP forecast to 8.3% for 2009 and Morgan Stanley and others are raising estimates to 7-8% GDP growth for China as well.
The natural growth rate in developed countries is 2%-3% a year compared with 7%-8% in the developing world. And it does not follow that developed countries are in decline while the BRIC countries are catching up and overtaking them, said Yevgeny Yasin, a leading Russian economist, former Minister of the Economy and currently head of research at the Higher School of Economics.
But he also said that they can only become leaders after they overcome what could be called a cultural hurdle.”
Mr. Yasin believes that the most influential country of the four is China due to the size of its population, the huge untapped domestic market and cheap labor.
China undoubtedly will have the greatest growth potential for another 15-20 years, he predicts.
Deutsche Bank's Chief Ecomonist for Greater China, Jun Ma also predicts early this month: China's GDP growth could surpass that of the United States within ten years, a period which will likely be accompanied by a gradual appreciation of the yuan.
“BRIC is a myth but a myth that is slowly becoming a reality,” said Alexei Pushkov, a professor of international relations and a leading Russian journalist.