Posted on 09 Jul 2008
China's economy to become world's biggest in 2035
China's
economy will overtake that of the United States
by 2035 and be twice its size by mid-century, a study released on Tuesday by a US research
organisation concluded.
The report by economist Albert Keidel of the Carnegie
Endowment for International Peace said China's rapid growth is driven by
domestic demand more than exports, and will sustain high single-digit growth
rates well into the 21st century.
"China's
economic performance clearly is no flash in the pan," Keidel writes.
"Its growth this decade has averaged more than 10
percent a year and is still going strong in the first half of 2008. Because its
success in recent decades has not been export-led but driven by domestic
demand, its rapid growth can continue well into the 21st century, unfettered by
world market limitation."
Keidel said the rise of China to the world's biggest
economy will happen regardless of the method of calculation.
Under current market-based estimates, China's gross domestic product is about three
trillion dollars compared to 14 trillion for the United States.
Based on a more controversial purchasing power parity (PPP)
measure used by the World Bank and others to correct low labour-cost
distortions, he said China's
GDP is roughly half of that of the United States.
"Despite this low starting point, if China's expansion is anywhere near as fast as
the earlier expansion of other East Asian modernisers at a comparable stage of
development, the power of compound growth rates means that China's economy will be larger than America's
by mid-century -- no matter how it is converted to dollars," Keidel wrote.
