China’s economy will increasingly rely on state investment, high-tech development and domestic consumption — with less input from its past staple of export manufacturing — as it stands to overtake the United States in the coming decade, analysts predict.
China’s GDP should grow 5.7 percent per year through 2025 and then 4.7 percent annually until 2030, British consultancy Centre for Economics and Business Research (CEBR) forecasts. Its forecast says that China, now the world’s second-largest economy, would overtake the No. 1-ranked U.S. economy by 2030. Credit insurance firm Euler Hermes made a similar forecast.
Chinese leaders have pushed over the past decade to rely more on value-added services over traditional factory exports, state media have said. The Sino-U.S. trade dispute and early 2020 workplace closures due to COVID-19 have added pressure on manufacturing.
The country that’s already known for fast economic growth over the past 20 years would see the state take more control over key sectors after intervening in several, including the internet, in 2021, economists expect.
The U.S. economy will keep growing but without spurts through 2030, Kapron predicts. China has a “huge base of engineers,” albeit less creativity than it needs to foster the “zany ideas” that drive development of new technology, said Douglas McWilliams, founder and executive deputy chairman of CEBR.
Status as the world’s largest economy does not confer any automatic advantages over others, economists said, but countries dependent on the Chinese economy would take note. “There is no gold medal or anything like that,” CEBR’s McWilliams told VOA. “But when you’ve got more money to spend, you do have the ability to influence things, and China will have that ability to influence things.”