China Economy to Overtake U.S. by 2035, Research Institute Says

By Kevin Hamlin

July 9 (Bloomberg) -- China's economy will overtake the U.S. by 2035, powered by domestic demand, according to a report by a U.S. research institute.

The world's fastest-growing major economy will become twice the size of the U.S. by the middle of the century, said the report by Albert Keidel of the Carnegie Endowment for International Peace in Washington.

The report refuted the idea that China depends on exports, saying its growth was ``overwhelmingly'' driven by investment and consumption at home. China's economy will rise to take global and institutional leadership and the U.S. will have an important secondary influence, much like Europe today, Keidel said.

``Because its success in recent decades has not been export- led but driven by domestic demand, its rapid growth can continue well into the 21st century,'' said Keidel. ``China's likely continued success will eventually bring an end to America's global economic preeminence.''

To contact the reporter on this story: Kevin Hamlin in Beijing on khamlin@bloomberg.net