China's economy rises to surpass the eurozone's economy
China's economic growth reaches a new milestone this year as it surpasses the eurozone. China has been the second largest economy, but this year it becomes the second largest currency bloc overtaking the eurozone
In 1992 the eurozone was 15 times larger than China, in 1995 10 times larger, in 2005 five times and three times larger in 2008. However, now China's GDP (in USD terms) is set to overtake the eurozone's GDP.
What's the takeaway?
China's growing share of the global economy will help its equities, bonds and currency. One point the Bloomberg article made was that the yuan accounts for less than 2% of global FX reserve holdings vs a 20% share for the euro. That gap should narrow in the years ahead resulting in longer term support for the yuan.