September 17, 2012
LONDON (Sept. 17, 8:35 a.m. ET) — India is likely to overtake China to become the world’s largest economy by 2048, according to a leading academic.
In the first of a series of lectures delivered in London last week Professor Douglas McWilliams, of Gresham College, said that China’s economy was already slowing and the country’s growth would decline to around 4 percent per year during the 2020s.
And while China would overtake the US as the world’s largest economy “by around 2023” forecasts from the Centre for Economics and Business Research (CEBR) suggested that India’s economy will outpace China’s in less than four decades.
However McWilliams warned there was “obviously a wide margin of error” in such forecasts.
China’s economy is expected to grow by 7.4 percent this year, a figure regarded in some quarters as a ‘hard-landing’ after the country’s phenomenal performance in recent years.
In his lecture McWilliams said that the scale of the competitive challenge from Asia industrialization for Western economies was particularly great “because the pace of change in the emerging economies has been so rapid that attitudes have not had time to adjust to prosperity.”
“In the east they do not take prosperity for granted and continue to work hard, support businessmen and keep taxes down. The average Singaporean works 2,307 hours a year; the average Hong Konger works 2,287 hours.
“We in Britain work 1,625 hours. It’s as if the average Singaporean worked over four months more a year in effect than we do,” he said.
Highlighting a more relaxed tax regime in Asian economies, McWilliams said if western regimes did not adjust their policies to match those of the competitive economies in the east there was a risk that the rest of Europe, including countries who were outside the euro, like the United Kingdom, “could slide in the same way that Greece now has into first stagnation and then economic collapse.”