China can sustain economic growth of at least 8 percent annually for the next 20 years, which means its economic scale could double that of the United States in terms of purchasing power parity, said the chief economist of the World bank.
Justin Yifu Lin, chief economist and senior vice president for development economics at the World Bank, said by 2030 China's economic scale will be double in terms of purchasing power parit, but similar to the size of the United States in terms of the foreign exchange rates between the U.S. dollar and the yuan. And China's per capita income could be half of the United States by then in terms of the purchasing power parity.
Currently the per capita income of the Chinese population is about 21 percent now if based on the purchasing power parity in 2008. The same already took place in Japan in 1951, in South Korea in 1977 and China's Taiwan in 1975, Lin noted.
Those countries and regions have all embraced rapid growth in the 20 years after that. Between 1951 and 1971, Japan's economy surged by 9.2 percent annually and South Korea enjoyed 7.6 percent growth between 1977 and 1997. The average growth of China's Taiwan reached 8.3 percent between 1975 and 1995.
Lin thinks China may take the advantage of the gap in income and technology with developed industrial economies. And the reform and opening-up policy that China adopted more than 30 years ago seems quite comparable to what Japan and South Korea has done during their economic take-off.
However, China also has to face several challenges in its development. One of the major challenges, for example, is the difficulty in shifting to a more domestic market-oriented growth as the foreign trade deficit will continue to decline, said Lin.
Inthat regard, he warned that the balance between consumption and investment could not be played down when everyone is talking about the importance of increasing the domestic consumption because investment is crucial to industrial upgrades and the development of an environmentally-friendly economy.
The unfair income distribution poses another big problem to China's economy. The solution, according to Lin, lies in real, substantial progress in reform.
