The Chinese economy, having already surpassed the euro area, will overtake the U.S. and become the largest economy in the world by 2016, after allowing for price differences, according to a recently released study conducted by the Organisation of Economic Cooperation and Development (OECD).
Though China's economic growth slowed in 2011 and 2012 after years of making significant economic strides, the OECD expects that "policy easing and a pick-up in infrastructure spending" will stimulate the region's economy. Further, the OECD cites China's recent slowdown as a contributing factor to lower inflation, which in turn will help drive future growth.
Reforms in China's financial sectors, primarily the easing of government-imposed monetary restrictions, will continue to be beneficial to the area, according to the report. Increased productivity as a result of an improved competitive environment, along with Chinese citizens' continued migration to large, industrial cities, will also play important roles in fueling the country's economic growth.
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