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 | Friday, April 28, 2000, updated at 13:21(GMT+8) | ||||||||||||
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A Report Predicts that China's Economy May Surpass Japan in 20 yearsA thematic report provided by Li Shantong of the Development Strategy and Regional Economy Research Department of the State Council Development and Research Center shows that in the coming 20 years, China can still keep the potential and impetus of high-speed development of economy. By 2020, GDP of China will exceed Japan, ranking the third in the world, next only to US and EU.In this research report entitled China Economic Growth Prospect, the author used dynamic equilibrium matrix for general calculation. On the basis of making different assumptions of basic influencing factors, and through compared analysis of different imitated variables, including population and labor, capital accumulation in economic growth and changes of productivity, he pointed out that the potential growth rate of Chinese economy can reach an average of 7.3% in the period of 2000 to 2020 with that from 2000 to 2010 being expected to approximate 7.9 percent. The report argues that during the past 20 years, the high-speed growth of Chinese economy was largely attributed to the fast capital accumulation and enhancement of productivity whereas the contribution from the growth of labor forces is the minor. Many researches on Chinese economic growth argue that from 1978 to 1997, the contribution of capital input to the growth of Chinese economy covers around 60%, that of productivity enhancement about 30% while the expansion of labor forces constituting only 12%. The report holds that with China's persistence in the policy of reform and opening-up, gradual establishment and improvement of socialist market economy and the further expansion and deepening in opening up as well as the gradual implementation of strategy on rejuvenating the country through science and education, it can be expected that China's productivity will keep a fast growth in the coming 20 years. First of all, the first 10 years in the next century will still see a fast development of an aggregate growth of labor force in China. With the accelerating industrialization and urbanization, a great number of rural surplus labors will shift to the secondary and tertiary industries thus providing an abundant labor force supply to their development of them. At present the huge rural population and low ratio of capital to labor will provide the potential with a further capital deepening in the coming 20 years. Meanwhile, the success of banking system reform and gradual establishment of capital market will also facilitate the improvement of capital utilization efficiency. All of these factors will help lead to the fact that the Chinese economy can still maintains the potential of fast development in the next 20 years. The matrix simulation analysis on the basis of the above-mentioned prerequisites shows that the average growth speed can reach about 7.3% from 2000 to 2020, the constant price of GDP in 2020 will be more than four times that of 2000. By then, the per capita GDP converted by the exchange rate will exceed 5,000 in US dollars, equivalent to the world average in 1997, and the aggregate amount of GDP will exceed Japan, second only to US and EU. If calculated by Purchasing Power Parity, the aggregate GDP could possibly approach the level of US at that time. After analyzing the structural change of population the report pointed out that the development of Chinese economy would be fast in the first ten years and then relatively slow down in the second ten years. The average growth speed in the former period is expected to reach 7.9% while that in the latter will drop to 6.6%.
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