China on way to overtaking United States as world's largest economy by 2030. Over the next decade, the combined gross domestic product (GDP) of the world's seven largest emerging countries (the “E7”: China, Russia, India, Mexico, Indonesia, Turkey and Brazil) will catch up with and overtake that of the G7 (United States, Japan, Germany, France, United Kingdom, Italy and Canada), to a great extent thanks to China which will overtake the United States to become the world's biggest economy, forecasts advisory service PricewaterhouseCoopers in a new study. Thus the E7 will also, by 2020, be more powerful within the global economy than the G7. In 2000, the combined GDP of the G7 countries was double that of the E7. The decade just past, however, has seen the emerging countries catch up with the developed countries, and the rate of catch-up has increased with the financial crisis. The gap between the G7 and the E7 is expected to be reduced to 35% this year and there will be parity by the end of the next decade, according to PricewaterhouseCoopers' calculations, which are based on projected GDP at purchasing power parities (PPP). The trend is likely to continue in the following ten-year period, so that, by 2030, the global top 10 economies are projected to be 1) China, 2) United States, 3) India, 4) Japan, 5) Brazil, 6) Russia, 7) Germany, 8) Mexico, 9) France and 10) United Kingdom. With 10% growth, India will push Japan out of its current second place. According to statistics given by the Chinese government, China enjoyed growth of 10.7% in the fourth quarter of 2009, far higher than the 6.1% recorded in the first three months of the year, while the Western developed countries registered only slight signs of recovery at the end of the year. Over the whole of 2009, growth in China was 8.7%, leading to a GDP of 33,535 billion yuan (around $4,911 billion) taking China very close to the performance of Japan, currently the world's second largest economy. Compared with the European Union, China's GDP is expected to overtake that of the euro area by 2030, according to Nobel Prize in Economics winner Robert Mundell. China's spectacular resistance to the crisis is the result of a particularly ambitious 4,000 billion yuan recovery plan, coupled with aid from state banks which proved very generous, lending 9,600 billion yuan during the course of the year - twice as much as in 2008. In a separate report on mergers and acquisitions in China, PricewaterhouseCoopers calculates Chinese foreign investment, excluding the financial sector, to be $43.3 billion last year, a new high, with a year-on-year increase of 6.5%. More than 40% of this investment, or $17.5 billion, was in mergers and acquisitions, the ministry says. According to experts, the rise in mergers and acquisitions abroad will only increase. A 40% increase in outflow is expected by 2020, as Chinese purchasers grow in confidence. In 2009, Chinese companies took advantage of the fall in share prices and the rude health of their national economy which, even at the worst of the slowdown, in the first quarter, was still growing at 6.1% annually. In contrast, companies worldwide were cutting back on their international purchases as a result of the downturn. According to Dealogic, the global volume of acquisitions was at its lowest since 2004, falling 24% year-on-year to some $2,400 billion, all sectors combined. The advanced technology, distribution, raw materials and energy sectors were the ones where Chinese companies were most active; the largest operations were in natural resources, with Australia in the firing line. Exports rose again in December 2009, increasing by 17.7% year-on-year. Over the year as a whole, China built up a trade surplus of $195 billion. Similarly, foreign direct investment (FDI) in China surged in December, up 103% from a year previously. It began to increase again in August after 10 months of decline. Over the year, FDI amounted to $90.03 billion, down 2.6%. (I.L./transl.rt)