China to become largest economy in 1 to 2 decades: economist

08:28, July 07, 2011      

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China will surpass the United States as the largest economy in one to two decades, predicted a Chinese economist at a world economic congress Wednesday in Beijing.

Qian Yingyi, a well-known economist in China and dean of the School of Economics and Management (SEM) of Tsinghua University, said China would become the world's largest economy "almost surely before 2020 in terms of purchasing power parity (PPP)."

Qian made the remarks at the 16th World Congress of the International Economic Association (IEA) held at Tsinghua University -- where world renowned economists including Joseph E. Stiglitz, Eric Maskin, Masahiko Aoki and Wu Jinglian, Lin Yifu gathered for the five-day congress.

In 2009, China's economy was 35 percent of the United States -- about 4.9 trillion U.S. dollars versus 14 trillion U.S. dollars -- at the exchange rate at that time.

"If the real growth rate difference between China and the United States remains at least 5 percent and the yuan appreciates at an annual rate of at least 2 percent relative to the U.S. dollar, then China will overtake the United States in less than 16 years or before 2025," Qian said.

China became the second largest economy in the world in 2010.

Its annual rate of economic growth has been above 9 percent on average over the past 32 years.

According to Qian, China's economic growth was supported by a number of factors including macroeconomic stability, a high savings rate, a flexible labor market and opening up policies.

"Even so, China's per capita income will still be only less than one quarter of that of the United States by then," Qian added.

Eric Maskin, 2007 Nobel laureate in economics, supervised Qian Yingyi when he worked at Harvard University in the mid 1980s to the late 1990s.

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