Here’s how China became the world’s No. 2 economy and how it plans on being No. 1
December 26, 2019 @ 07:14 +03:00
China is on the cusp of keeping a big promise — a vow to double its GDP and income in a decade and take the country to the forefront of the global economic power structure. The nation now faces the challenge of keeping the momentum going in the face of mounting challenges.
China has climbed to No. 2 in the world, with a GDP of $13.1 trillion that, while still trailing the U.S., keeps getting closer. Forecasters expect that growth just north of 6% in 2020 will get to the stated goal of doubling the economy from 2011-20.
On the other hand, China also is a country that appears to be taking the worst of the trade war with the U.S. and faces myriad other challenges to keep up to torrid pace of growth.
The trade war damage to the economy is palpable and measurable. Fiscal revenue growth has fallen to 3.8% in 2019 from 6.2% a year ago as the rise in tax receipts has been barely positive after increasing 8.3% in 2018, according to Nomura Global Economics, citing data through October. In addition, export growth declined 0.3% through November after rising 9.9% for the same period a year ago, due to the collapse of U.S. exports, which declined 12.5% in 2019 compared to 2018 growth of 8.5%.
Looking further out on the timeline, there are plenty of reasons to expect that China’s drive toward No. 1 will have strong tailwinds, which will be propelled by amplifying what pushed the country’s growth over the past decade.
China also is investing heavily in 5G technology as part of the modernization and urbanization efforts. The purpose is to get houses connected so that they are heavily automated, while students can use virtual reality learning to help with everything from online tutoring to homework.
Here’s how China became the world’s No. 2 economy and how it plans on being No. 1, CNBC, Dec 26