As China’s economy grows rapidly, it will surpass the world’s No. 1 US in scale in six to seven years, according to the global investment bank Bank of America (BoA). The Chinese economy is expected to grow at an annual average rate of 4.7%, and by 2035 it will double its current level.
BoA Economist Helen Chao said in a recent forward-looking report, “The goal of President Xi Jinping to double the amount of gross domestic product (GDP) and per capita income in 2035 is a sufficiently achievable scenario. “The reform and opening policy of Korea will accelerate the achievement of these goals.”
In terms of economic scale, the BoA predicts that China will surpass the United States to become the world’s largest economic power in 2027-2028. China’s GDP was $1.4 trillion last year, 70.3% of the US ($2.99 trillion). This is the first time that China’s GDP has exceeded 70% of the US.
The bank explained that after the novel coronavirus infection (Corona 19), China was able to significantly narrow the gap in growth rate with the United States. This is because China was the only major country to grow 2.3% last year, but the US stepped back by 3.5%. According to the International Monetary Fund (IMF), China’s GDP growth rate this year is 8.1%, far ahead of the US (5.1%).
Three factors were cited as threats to the growth of China’s economy. It is a rapid aging population, a high debt-to-GDP ratio, and an investment-driven growth model. In response, the BoA predicted that “this threat will act as a factor that slows China’s growth, but it will not derail its trajectory.” Most of all, it is because the Chinese government is well aware of these threats and is simultaneously pursuing policies such as debt reduction, mega-urbanization, and service market opening.
Chao Economist diagnosed, “It is highly likely that we will achieve the goal of doubling GDP in 2035, but the decisive variable remains.” He added, “At this stage, it is difficult to be sure that the two powers will maintain a peaceful relationship.”
New York = Correspondent Jae-Gil Cho [email protected]
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