China's economy to surpass US by 2035


China’s economy will surpass that of the United States by 2035 and be twice its size by midcentury, a new report by a Washington-based research institute concludes.

China’s rapid growth is driven by domestic demand - not exports - and will sustain high single-digit growth rates well into this century.

In the report - 'China’s Economic Rise - Fact and Fiction' - author Albert Keidel examines China’s likely economic trajectory and its implications for global commercial, institutional and military leadership.

Key conclusions of the report include -

  • Potential stumbling blocks to sustained Chinese growth - export concerns, domestic economic instability, inequality and poverty, pollution, social unrest - or even corruption and slow political reform - are unlikely to undermine China’s long-term success.

  • China’s financial system, rather than a shortcoming that compromises growth potential, is one of the strengths of what the report calls 'China’s money-making machine' - in part, because of its ability to support the financing of infrastructure and other public investments necessary for sustained rapid growth.

  • A Chinese economy that eclipses the US by midcentury has both commercial and potential military implications. China will be the pre-eminent world commercial influence. China’s military capabilities are a small fraction of the United States’ today, so there is time to prepare for a very different world in fifty years, states the report.

  • American policy-makers should take this opportunity to enact wide-ranging domestic reforms and rethink their concepts of global order.

Keidel says - "China’s economic performance clearly is no flash in the pan. 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 twenty-first century, unfettered by world market limitation.

"China’s likely continued success will eventually bring an end to America’s global economic preeminence, requiring strategic reassessment by all major economies - especially the United States, the European Union, Japan and even China itself.”

To download the report - 'China’s Economic Rise - Fact and Fiction' - Click Here