The BRIC [ Images ] (Brazil [ Images ], Russia [ Images ], India [ Images ] and China) economies will continue to grow significantly even as economic giants across the world are getting affected by the recessionary fears, says a report.
"The growing economic importance of India, Brazil and Russia will have important consequences," Deutsche Bank Research said in a report, adding that "economically, financially and politically, China overshadows and will continue to overshadow the other BRICs."
Regarding India, the report said, the country would have to overcome domestic opposition to growth-enhancing and growth-sustaining economic reforms to carry forward its growth momentum.
Besides, "it is not clear yet that the leap-frogging 'services revolution' will turn out to be an economically and politically viable development model," the report added.
Besides, other BRIC economies like Brazil and Russia are also facing challenges because of which China would continue to outperform its peers over the next couple of decades.
"Investment ratios in Brazil remain very low. Russia is overly dependent on hydrocarbons and is facing very adverse demographic developments," the report said.
China's economy is larger than that of the three other BRIC economies (Brazil, Russia and India) combined. Besides, China's exports and its official forex reserve holdings are more than twice as large as those of the other BRICs combined.
"China's relative and absolute economic importance will continue to rise for the foreseeable future. In terms of economic growth, China has been outperforming the other BRICs by a wide margin over the past thirty years," the report said.
High savings rate, low level of urbanisation, low per capita income and a successful export-oriented strategy underpinned by strong investment in infrastructure and education would sustain China's economic performance so much so that China would soon become the world's largest economy by 2025-30.
"With every year that goes by, China's economic, political and financial weight will increase - and incentives to make its voice heard in global economic and financial affairs will become concomitantly and inexorably stronger.
Recent official Chinese comments on US financial policy and the reserve status of the dollar already point to greater assertiveness than in the past," the report added.
However, China is likely to face challenges like gradually deteriorating demographics and environmental sustainability up to potential international trade frictions, the report said.