China will be the 'most important marginal driver of global GDP,' ex-Goldman Sachs economist Jim O'Neill says

• China's economy will erase all its 2020 losses next year and still record positive growth for this year, ex-Goldman Sachs economist Jim O'Neill told CNBC.
• He said: "China is well on the way to recovery. It is the country that really matters globally within the BRIC group."
• O'Neill said other BRIC nations - Brazil, Russia and India - are "considerably behind" in their economic recovery.
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Chinese GDP is set to end the year in positive territory and the economy will erase all its 2020 losses next year, ex-Goldman Sachs economist Jim O'Neill told CNBC.

The economist who is famous for coining the term "BRIC" in the early 2000s, in reference to Brazil, Russia, India and China, said he believes China's economy will be the "most important marginal driver of global GDP."

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"I suspect Chinese GDP growth could actually end 2020 as net positive still," he said. "By end [of] 2021, Chinese GDP growth will have possibly even made up for, not only the losses, but the loss in the trend also."

The world's second largest economy has been ahead of the game in containing the virus and bouncing back from it. It's economy expanded by 3.2% year-on-year in the second quarter of the year and by 11% compared to Q1, beating Reuters economists' predictions.

This came after a 6.8% drop in output in Q1, its first contraction since 1992.

Chinese retail sales rose for the first time this year in August to 0.5% compared to July, while industrial production increased for a fifth straight month.

O'Neill said China is well "on its way to recovery". Even though China was the first to be hit by the pandemic through an outbreak in its Wuhan province, data from John Hopkins University shows it has suffered just over 90,000 infections and less than 5,000 deaths, compared with nearly 7 million infections and almost 200,000 deaths in the United States, the worst-affected country.

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"As I have said, China is well on the way to recovery. It is the country that really matters globally within the BRIC group," O'Neill said.

He told CNBC that Brazil, India and Russia, three most heavily hit countries after the US, are "considerably behind" in their road to economic recovery.

India's GDP shrank by 23.9% in the April-June 2020 period.

"I suspect — with a lag — they [BRI countries] will share in the V-like immediate bounce back, partially in Q3, but especially in Q4 2020," he added.

The OECD predicts all G20 countries apart from China will enter recession this year, but it expects global GDP to return to its pre-pandemic level by the third quarter of 2021.