"Financial Times"The Chinese economy will not catch up with the US until 2060

The Financial Times reported that President Xi Jinping’s goal is to elevate China to the level of a developed middle-level country in the next decade, meaning that the economy will have to grow by about 5%.

However, underlying trends, demographics, high debt, and low productivity growth suggest that the overall growth potential of the Chinese state is about half that.

she said truth The impact of China’s 2.5% growth was not accounted for anywhere, including Beijing, for one reason only: assuming U.S. growth of 1.5% with similar inflation and a stable exchange rate, “China will not overtake America as the world’s largest economy.” “. in the world until 2060, if it happens at all, ”the publication believes.

“Long-term growth depends on more workers using more capital, using it more efficiently and productively. China, with its declining population and low productivity growth, is growing by injecting more capital into the economy at an unsustainable pace,” she added.

Currently, China is a middle-income country with an annual per capita income of $12,500, which is one-fifth of that of the United States. Today, there are 38 advanced economies, all of which surpassed the $12,500 income level in the decades after World War II, most of which grew gradually.

Of these, only 19 economies grew by 2.5 percent or faster over the next 10 years thanks to an increase in the number of workers. The number of working age increased by an average of 1.2% annually.

China is a different case. It will become the first major middle-income country to maintain GDP growth at 2.5% despite a decline in its working-age population that began in 2015.

The decline is sharp in China, which will shrink by about 0.5% per year in the coming decades, combined with debt reduction.

The 19 countries that maintained 2.5 percent growth after reaching China’s current income levels averaged 170 percent of GDP in debt. None of the economies had debt comparable to China’s high levels.

Before the 2008 crisis, China’s debt remained stable at around 150% of GDP, after which it began pumping up loans to boost growth, and by 2015 the debt had risen to 220% of GDP.

The newspaper argued that China’s 2.5% rise has serious implications for its ambitions as an economic, diplomatic and military superpower. We will most likely see a smaller Chinese economy than the world thinks.

Source: Financial Times.