China will become the world’s largest economy in 2024, according to the global information provider IHS Inc. (NYSE:IHS). “Over the next 10 years, China’s economy is expected to rebalance toward more rapid growth in consumption, which will help the structure of the domestic economy,” Rajiv Biswas, IHS chief Asia economist, said in a statement by the company based in Englewood, Colo.
Chinese consumer spending is forecast to grow at an annual average rate of 7.7 percent in real terms during the next decade, becoming a key engine of global consumer demand and world growth, IHS said. As a result, it predicted China will overtake the U.S. in terms of nominal gross domestic product in American dollars in 2024. At that point, nominal GDP will be $28.25 trillion in China and $27.31 trillion in the U.S., IHS said.
Biswas said China’s share of world GDP is forecast to rise to about 20 percent in 2025 from about 12 percent in 2013.
“The transmission effects of the strong growth in Chinese consumer demand are already being felt throughout the Asia-Pacific region,” Biswas said. One notable impact has been through Chinese international tourism visits to other Asian countries.
Total Chinese tourism spending abroad rose to $129 billion last year, which makes China the largest source market for international tourism spending globally, according to estimates of the United Nations World Tourism Organization recapitulated by IHS.
Check out the following two comparative charts, the first showing IHS forecasts of nominal GDP in China and the U.S., and the second showing IHS Global Consumer Markets forecasts of consumer spending in China, India, Japan and the U.S.: