September 01, 2008

Various forecasts of China's Economic Growth

Several economists have projected future economic growth for China

Albert Keidel at the Carnegie Endowment for International Peace in Washington says that when Japan was at China's current level of GDP of just over $2,000 per capita, and headed for $10,000, it sustained growth rates of 8-10 percent. So did South Korea and Taiwan. Keidel expects China to grow more swiftly than its three neighbors did at the same stage of development. The result, he says, is that China will match America for economic size by 2035 and be twice as big by mid-century.

Japan in the late 1960s "one of the most polluted countries in the world". Japan, however, started to tackle its pollution, giving its environmental agency de facto cabinet status in 1971. China, now following suit, did the same earlier this year.By some measures, China is even ahead of the game, Keidel argues. By 2004 in Beijing, ambient sulfur dioxide had already fallen far below Japan's peak levels in the mid-1960s.

China encouraged early improvements in the business climate for foreign investment that Japan and South Korea never allowed.

Aging Population Pessimists still project 7.5% growth
Derek Scissors of the Heritage Foundation, draws a much gloomier lesson from Japan's experience. The number of Chinese in the industrious 15-24 age cohort grew by 20 million between 2000-2005, but the increase in 2010 will be just 1 million on U.N. projections. It will then drop sharply, as a consequence of China's one-child policy, and the country's overall working population will shrink after 2015. Dong Tao of Credit Suisse also cites Chinese demographic trends as a key reason why Chinese GDP growth is likely to head down to 7.5 percent in 2011-2020 from around 10 percent now.

Urbanization and Producivity
Arthur Kroeber, head of the Dragonomics consultancy in Beijing, is convinced that urbanization, productivity gains and fast-rising incomes bode well for continued growth in China. [This site is also optimistic about urbanization and productivity gains] "Put all that together and you can certainly get 8 or 9 percent GDP growth in China for the next few years," he said.
The pessimistic 7.5% 2011-2020 case would only delay the following projection by 1 or two years.

Year GDP(yuan) GDP growth Yuan per USD China GDP China+HK/Ma US GDP
2007 24.66 11.9% 7.3 3.38 3.7 13.8
Jul08 26.3 6.85 3.83 4.2 Past Germany
Oct08 26.7 6.65 4.0 4.45
2008 27.3 10.2% 6.35 4.3 4.8 14.0
2009 30.1 9.8% 5.62 5.4 5.9 14.2 Pass Japan
2010 33.7 9.5% 5.11 6.6 7.1 14.6
2011 37.0 9.5% 4.64 8.0 8.5 15.0
2012 40.6 9.5% 4.26 9.5 10.0 15.4
2013 44.2 9.0% 3.91 11.3 11.8 15.9
2014 48.2 9.0% 3.72 13.0 13.5 16.4
2015 52.0 8.0% 3.54 14.7 15.2 16.9
2016 56.2 8.0% 3.53 16.7 17.2 17.4 Passing USA
2017 60.4 7.5% 3.38 18.8 19.4 17.9 Past USA
2018 64.2 7.0% 3.20 20.9 21.5 18.4
2019 69.2 7.0% 3.09 23.0 23.6 19.0
2020 74.0 7.0% 3.0 25.2 25.8 19.6
2021 78.4 6.0% 2.9 27.2 27.8 20.2
2022 83.1 6.0% 2.9 29.4 30.0 20.8
2023 87.3 5.0% 2.8 31.5 32.2 21.4
2024 91.7 5.0% 2.8 33.7 34.4 22.0
2025 96.3 5.0% 2.7 36.1 36.8 22.7
2026 101.1 5.0% 2.6 38.7 39.4 23.4
2027 106.1 5.0% 2.6 41.4 42.1 24.1
2028 111.4 5.0% 2.5 44.4 45.1 24.8
2029 117.0 5.0% 2.5 47.5 48.2 25.5
2030 122.8 5.0% 2.4 50.9 51.6 26.3 Close to double USA


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