China projected to overtake US as the largest economy by 2017

Updated 07 February 2013
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China projected to overtake US as the largest economy by 2017

The world economy is projected to grow at an average rate of just over 3 percent per annum from 2011 to 2050, doubling in size by 2032 and nearly doubling again by 2050.
China is projected to overtake the US as the largest economy by 2017 in purchasing power parity (PPP) terms and by 2027 in market exchange rate terms. India should become the third 'global economic giant' by 2050, a long way ahead of Brazil, which is expected to move up to 4th place ahead of Japan, according to a report by PricewaterhouseCoopers.
Russia could overtake Germany to become the largest European economy before 2020 in PPP terms and by around 2035 at market exchange rates. Emerging economies such as Mexico and Indonesia could be larger than the UK and France by 2050, and Turkey larger than Italy.
Outside the G20, Vietnam, Malaysia and Nigeria all have strong long-term growth potential, while Poland should comfortably outpace the large Western European economies for the next couple of decades, the PwC said in its report "World in 2050: The BRICs and beyond: Prospects, challenges and opportunities.
The PwC report updated its long-term global economic growth projections, which were last published in January 2011. These are based on a PwC model that takes account of projected trends in demographics, capital investment, education levels and technological progress.
“We can see that emerging economies tend to grow at 4 percent per annum or more, while advanced economies grow at around 2 percent or less — we will continue to live in a two-speed world economy for some decades to come as a catch up process continues,” the report said.
However, even in 2050 average income per capita will still be significantly higher in the advanced economies than in the emerging economies — the current income gap is just too large to bridge fully over this period.
The projected long-term growth trends pose many opportunities and challenges for businesses in the UK and other Western economies. China, India, Brazil and the other emerging markets highlighted in PwC study will become not just low cost production locations but also increasingly large consumer markets. At a time when trend annual growth is projected to be no more than around 2 percent in the advanced economies, companies seeking growth will need to look increasingly to these emerging markets. At the same time, such markets can be challenging places to do business. It will be important to understand and adapt to local rules, regulations and customs. The right entry strategy and, where appropriate, the right joint venture partner(s) will be crucial, as will good relations with local government and regulatory bodies. In some cases, the optimal production locations may not be the same as the largest consumer markets (e.g. investing in Malaysia, Indonesia or Vietnam as a gateway to China or India, or in Poland as a gateway to Russia). The report said there are also important challenges for governments, not least regarding natural resource constraints such as those relating to energy use and climate change.


OPEC will balance oil markets, but spare capacity limited — Nigerian official

Updated 42 min 20 sec ago
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OPEC will balance oil markets, but spare capacity limited — Nigerian official

  • ‘OPEC will do everything to stabilize, to balance the market’
  • Nigeria’s current crude oil production is about 1.7 million bpd

SINGAPORE: The Organization of the Petroleum Exporting Countries (OPEC) will act to balance the market after oil prices hit their highest in four years, but its options may be limited by available spare capacity, a Nigerian oil industry official said on Wednesday.
“It’s obvious that if you have high prices it’ll affect demand, so you have to do some market balance,” Malam Mele Kyari, head of crude oil marketing at Nigeria’s state oil firm NNPC and also the country’s OPEC representative, said.
“OPEC will do everything to stabilize, to balance the market but I’m sure you’re also aware that there’s a limit to what they can do. You must have the spare capacity,” Kyari said.
Oil prices surged this week on uncertainty over the global supply outlook following US sanctions on Iran’s oil exports and also as Saudi Arabia and Russia ruled out any immediate boost to output.
Kyari said Nigeria planned to increase its crude oil, condensate output by 100,000 barrels per day by the end of the year, up from about 2 million bpd currently.
The country’s current crude oil production is about 1.7 million bpd, he said.
In 2019, the African producer is aiming for an average output of 2.3 million bpd by boosting output from existing fields as well as starting new production from an ultra-deepwater field, Kyari said.
Located some 130 kilometers off Nigeria’s coast at water depths of more than 1,500 meters, the Egina oilfield is expected to start production in December and its output could peak at 200,000 bpd.
Kyari was in Singapore to launch the new Egina crude grade with field operator French oil major Total at APPEC.
The crude has an API gravity of 27.3 degrees and has a sulfur content of 0.165 percent, a provisional crude assay from Total showed.
The grade has a higher yield of gasoil and vacuum distillates compared with other products, according to the assay.