April 25, 2024
World Economy

China likely to be No.1 economy by 2035 with continuous momentum: international think tank


Shenzhen Qianhai Comprehensive Bonded Zone in South China's Guangdong Province on December 15, 2023 
Photo: Chen Tao/GT

Shenzhen Qianhai Comprehensive Bonded Zone in South China’s Guangdong Province on December 15, 2023 Photo: Chen Tao/GT

China’s GDP is estimated to surpass that of the US, with the country becoming the world’s largest economy in about 2035, said a report released by a think tank comprising scholars from five countries – the US, Russia, Canada, India and China. The report indicated that China’s promising growth will carry the world economy forward.

The report also said China needs to rely on the sustained and cumulative “compounding interest” to achieve its 2035 vision, with the help of the gradual realization of high-quality development, and to cultivate and develop new quality productive forces. 

The ambitious projection was from one of the 10 visions for China in 2035 from a joint research report by a five-country think tank team, including the Chongyang Institute for Financial Studies at Renmin University of China, released on Sunday during an international symposium. 

Domestic and foreign analysts said that China will maintain steady growth momentum and will meet the annual GDP growth target for 2024 while addressing challenges cautiously. 
 
According to the report, China will overtake the US as the world’s top economy in about 2035 with a high probability, if it maintains GDP growth of about 5 percent annually in the next few years, and at least 4 percent growth until 2035.

The vision is based on China’s faster economic growth than the US, as well as the continuous appreciation of the yuan and its increased internationalization, and the long-term bullish outlook for the yuan against the US dollar, the report said.

The report said that developing countries will become the core engine of global economic growth, and their high growth rates could double global GDP in the next decade.

China has set a growth target of about 5 percent for its economy in 2024, which exceeded the expectations of some international institutions. 

In 2023, China’s economy grew by 5.2 percent year-on-year, exceeding the official target of about 5 percent, in what officials called a “hard-won” achievement.

John Ross, a senior fellow at the Chongyang Institute for Financial Studies, told the Global Times at the symposium that there is “no reason why it [China] shouldn’t meet that [the 2024 GDP growth target].”

China’s investment is much more efficient than that of the US, he said, noting that if China invests about 40 percent of GDP then China’s GDP growth will hit 5 percent. This means that China’s economic growth rate will largely exceed the US and the EU, based on last year’s data, and China will remain the main driver of world economic growth as it has for the past 40 years.

Marco Fernandes, a Beijing-based Brazilian researcher at the Tricontinental Institute for Social Research, told the Global Times on Sunday that China is already a bigger economy in terms of per capita purchasing power, and he suggested that it is very possible for China to surpass the US in GDP in US dollar terms. 

Fernandes said the Chinese economy has to face challenges ahead, including overcapacity, and a shift from a model more based on infrastructure in real estate to one that’s more based on high technology. 

“I think despite of some of the challenges in some sectors we have had in the past year, China has many tools to deal with that, much more than the West has,” he noted. 

The report showed that China has made remarkable accomplishments in high-quality economic and social development in recent years, and such achievements are a manifestation of China’s “compounding interest.” 

The momentum of China’s modernization, characterized by the development of “compounding interest,” focuses on taking innovation-driven initiatives, deepening reforms, expanding opening-up and promoting green development, the report said. 

The report also said that the long-term vision will be achieved with the help of China pursuing the gradual realization of high-quality development, cultivating and developing new quality productive forces and continuing to renew policy highlights.

In order to develop new engines for economic growth, China will strive to modernize the industrial system and develop new quality productive forces at a faster pace, said the Government Work Report.

Radhika Desai, a professor in the Department of Political Studies and director of the Geopolitical Economy Research Group, University of Manitoba, Canada, said during the seminar that observers in China and abroad agreed that China has embarked on a new era of structural transformation.

Some Western countries smear China’s strategy to foster new quality productive forces for not prioritizing consumption sufficiently, for flooding the world market with cheap products, this time in high technology, and for pursuing policies that interfere with markets. But Desai said that China has not given consumption a lower priority. It continues to rise in absolute terms, and this rise includes the unequalled feat of lifting 800 million people out of poverty.

“China’s rising levels of consumption have always rested on its high investment-powered growth and this will remain true in the next phase of its growth,” she said. 



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