Last week, Buffett’s “closest comrade” Charlie Munger said at the annual meeting of the newspaper company Daily Journal Corp that if he were Chinese, he would invest in China. Not the United States, because “the fruits there hang lower, and some companies have already established a foothold… At the current price, investing in China is better than the United States.”
Munger is not the only one who is optimistic about China. Recently, the well-known accounting firm PricewaterhouseCoopers released a report stating that China’s GDP has surpassed the United States and become the world’s largest economy based on PPP calculations; China will become the world’s largest economy by 2030 based on market exchange rates.
PwC released a report titled “Long-term View: How Will the Global Economic Order Change in 2050?” “The report also predicts and ranks the GDP of the world’s 32 largest countries (accounting for 85% of global GDP). PricewaterhouseCoopers predicts that in 2050, China’s economy (calculated on a purchasing power parity basis, hereinafter referred to as “PPP”) will rank first in the world, India will be second, and the United States will be ranked third by then.
The report predicts that the trend of global economic power shifting from traditional advanced economies to emerging economies will continue. In the long term, emerging market countries will continue to increase their proportion of global GDP. By 2050, the global economic aggregate will more than double, with an average annual economic growth rate of 2.5% from 2016 to 2050. Most of the global growth momentum will come from emerging markets and developing countries.
PwC estimates that the average growth rate of emerging markets (E7, China, Brazil, India, Indonesia, Mexico, Russia, Turkey) will be that of developed economies (G7, the United States, the United Kingdom, Canada , France, Germany, Italy and Japan). Therefore, 6 of the world’s 7 largest economies in 2050 will be emerging market countries, with China ranking first, India ranking second, and Indonesia ranking fourth.
The United States’ global GDP ranking will slip to third place, the UK will slip to 10th, France will fall out of the top 10, and Italy will fall out of the top 20.
(The article is based on Yicai, PwC)
