Ten years from now, China will have overtaken the US as the world's largest economy.
A report released by IHS shows how a surge in consumer spending in what is currently the world's second largest economy will take it into first place.
It predicts that such spending in China will increase by an average of 7.7 per cent each year from now until 2024, at which point it will have tripled from $3.5tn to $10.5tn. US consumer spending is also set to increase, but not so significantly.
This in turn is predicted to take China's nominal GDP up from $10tn to $28.3tn. Not only will it cause China's consumer market to be three times bigger than Japan's, but it will also put China ahead of the US, whose GDP is set to increase from $17.4tn to $27.4tn during the same time period.
If these predictions are correct, China will hold a fifth of the world's GDP by 2025 – up from 12 per cent today. The shift would be a watershed moment, as the US has had the world's biggest economy for over a century.
“China's economy is expected to re-balance towards more rapid growth in consumption, which will help the structure of the domestic economy as well as growth for the Asia Pacific (APAC) as a region,” said Rajiv Biswas, IHS's chief Asia economist.
The report also says that other South Asian countries will benefit from China's spending thorough an increase in trade. It predicts India's consumer market to overtake Japan's by 2023. "China's economy will play an even bigger role as a key driver of global trade and investment flows,” said Biswas.
From China's perspective it is not all positive, however. The IMF has warned that it should aim for a safer growth rate of seven per cent in 2015, since without structural reforms growth could slow down to as little as 2.5 per cent by 2030.