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the more income they take from workers. Last but not least, the artificially low interest rates that reduce household income resulted in reducing household saving returns, while supporting local industry by lowering cost of capital. All of these ‘problems’ could enhance China’s export driven economic growth; however they transfer the benefits from local household consumers to local producers. (Pettis, 2012) To rebalance the economy would require the cost in form of slowing the exports growth.

The economic reform, if continued to persist, would result in a slower growth, yet may result in a more sustainable model for a better stage of the economy. A study report carried out by the National Intelligence Council had concluded that “If Beijing fails to transition to a more sustainable, innovation-based economic model, it will remain a top-tier player in Asia, but the influence surrounding what has been a remarkable ascendance will dissipate,'. In other words, the assumption that China’s economy would overtake that USA may base on the result if China could successfully transit its economic growth to a more sustainable model other than heavily dependent on export and investment. There are also dividing conclusions made by various economists and researchers.

For instance, senior researcher with the American Research Institute at the Chinese academy of Social Sciences, Tao Wen Zhao had said that he believed the US would remain to be the leading superpower and maintain its status by the year 2020, as China was lagging behind at least 50 years on many aspects. 'It's likely that China's gross domestic product will be bigger than the US GDP by then. But it is definitely impossible for China to leapfrog the US in terms of comprehensive strength in less than 20 years, particularly in key areas like science and technology, education, and the military.' (South China Morning Post, 2012)

On the other hand, the International Monetary Fund’s latest projections have noted that China’s economy will be big enough to overtake that of the United States around the time of 2016 (International Monetary Funds, 2012). The standard modeling of future economic multipolarity by the World Bank also predicted that China will contribute about one-third of the world’s share of growth by 2025, incomparable to any other economy. (Global Trends, 2012)

Nevertheless, there are problems that China would have to overcome in order to achieve these predicted goals in the near future. The population of China will start aging, there would be slower rate of growth, and there are prospect of being trapped in middle-income status. The aging of China’s population may due to its one-child policy that was used to control population growth and prevent over expansion of population (BBC news, 2012), this however means that the labour force to population ratio would meet a rapid fall, along with the increasing medical costs. Furthermore, the middle-income status is due to inequality of income and inability to rebalance the economy that enforces the significant for China to persist on its reform on economy structure (Global Trends, 2012). At last, the slowing of growth would increases difficulties in meeting expectation and may create dissatisfaction and loss of investor confidence.

In conclusion, there are high expectations for China that forecast it to take over the United States and become the new leading economy. How