China capable of sustaining growth

Philippine Tribune
Philippine Tribune

LONDON: China has the potential and the capacity to continue to grow rapidly and double its gross domestic product (GDP) per capita relative to most advanced countries over the next generation, renowned British expert on global economics Martin Wolf has told Xinhua.

In a wide-ranging exclusive interview, Wolf, chief economics commentator at the London-based Financial Times, said China was also on target to overtake the United States as the world’s biggest economy.

Wolf noted China’s GDP per head has the potential to double over “maybe a generation, maybe 20 to 30 years or so.”

“What makes this plausible in China’s case is what it’s achieved so far. My back-of-the-envelope calculations suggest GDP per head has doubled four times in the last 40 years. Another doubling doesn’t seem such a revolutionary step,” Wolf said.

China clearly possesses the resources to achieve this, with a high investment rate, a well-educated population and substantial competitive advantages in important dynamic sectors of the world economy, said Wolf.

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Wolf said if China’s GDP per head doubles in the next generation, it would become the world’s biggest economy.

“If the potential I’ve described, which I’m sure exists, is actually exploited, then China will become the biggest economy in the world for the foreseeable future,” said Wolf.

“If you look at the size of China, and look at the capacity of the Chinese people, it doesn’t seem to me rational to think with any strong conviction that it won’t become the biggest economy in the world,” he said.

China will become the biggest economy in the world as long as its GDP per head reaches about 35 percent in real terms of the United States, a scenario the British economist considers “immensely plausible.”

Additionally, he criticized the “de-risking” policy against China by some Western countries, including Britain and the United States, as politically and economically harmful to both sides.

“De-risking” has created a lot of uncertainty, which is unfavorable for the economy and has created political hostility, said the expert.

Some politicians in Britain are hyping up “cutting off China,” which is “completely impractical,” said Wolf, adding that Brexit has reduced Britain’s strategic relationship with Europe and made the country inevitably and strategically closer to the United States.

“I don’t think the people who want to cut us off from China are really dominant by any means, but there’s this additional factor that we have become inevitably, strategically more dependent on America… So that makes it more difficult for Britain to diverge significantly from the Americans on any substantial point.”

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