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World Bank Official Foresees Potential in ChinaIn 20 years China will have the second-largest economy in the world, with its economy shifting to a knowledge-based, service one, a senior World Bank official said on Monday."If you project current growth trends out 20 years you'll see that China will no longer be the tenth largest trading partner in the world but probably number two," the Hong Kong Standard Monday cited Yukon Huang, the World Bank official in charge of the Bank's operations in China, as saying. According to the Washington-based development bank's quarterly economic review, the Chinese economy, which is classified under the category of transition economies, obtained a growth of 9.6 percent, 8.8 percent and 7.8 percent in 1996, 1997 and 1998. The Chinese economy in 1999 is estimated to grow by 7.1 percent, while the growth in 2000 and 2001 are projected to reach 7.0 and 7. 2 percent respectively, the economic review said. Huang forecast that even if the Chinese economy grows by 6 percent or 7 percent and not 9 percent or 10 percent, China will become the second-largest economy in the world. The World Bank official, who is managing an annual 3 billion U. S. dollars lending program in China, sees the inevitability for the China economy to shift to a knowledge-based, service one from the current agriculture-driven one. The agricultural population, which makes 50 percent of the total, will be 20 percent 20 years from now, Huang said. Twenty years ago China's agricultural population was 70 percent. Since the ratio of arable land to the population is very unfavorable and there's no other way for China to employ 1.3 billion people, 20 years from now China will transit to a knowledge-based, service economy, the WB official predicted. Although the land has been the source of China's productivity growth and its income growth in the past 20 years, it would not be the base of its future success. China cannot provide productive jobs for its people unless it has much larger service sector, he said. Currently China's service sector is too small, contributing only 30 percent of its gross domestic product, compared with 50 percent in Brazil and the Philippines. In a related development, Huang said China's imminent accession to the World Trade Organization (WTO) will be very useful for the Chinese mainland's economic transition. In his view, China is eventually going to be an economy like the United States, less dependent, and in some sense less concerned about the external economy because of the size and variety of its domestic economy. In 20 years' time, China's economic growth prospects will be largely determined by what's happening domestically. There will be a shift from a focus on the coastal provinces to the central provinces, and distribution centers and direction of growth will be more affected by north-south corridors and east-west corridors, Huang said.
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