Li Yifu: Reform Can Help China Maintain 8% Growth Over Next Two Decades
Even if the reforms that he’s calling for bear out, think the former WB lead economist is a bit optimistic. A more realistic scenario would be GDP dropping to 7% by the end of the decade and even further in the 2020s. ———————
China’s economy has the potential to grow 8 per cent annually over the next 20 years should the nation reduce support for state companies and unshackle banks, according to Lin Yifu, a former World Bank chief economist. “We can be quite optimistic,” Lin, who now teaches at Peking University in Beijing, said at a New York Stock Exchange conference on China’s economy yesterday.
To harness its potential, the country needs to widen income distribution and cap “widespread” corruption, he said. The Chinese economy is showing signs of recovering from a slowdown that spanned the seven quarters to Sept. 30, with data from manufacturing to retail sales and industrial production indicating expansion over the past two months.
The world’s second largest economy is poised to grow 8.1 per cent this year, from 7.7 per cent in 2012, according to the median estimates of 49 economists surveyed by Bloomberg last month. Lin predicted that China’s gross domestic product will rise as much as 8.5 per cent this year, driven by investment in infrastructure, upgrades of equipment and machinery, and personal consumption.
China can sustain such a fast pace of growth in the long term by using technologies created in developed economies at relatively low cost, Lin said. China is following 13 other countries that have maintained an expansion rate of more than 7 per cent annually for 25 years, including Singapore and South Korea, he said. Lin, 61, was chief economist at the Washington-based World Bank, a post typically held by European and U.S. citizens, between 2008 and 2012.
– Brisbane Times
Here is a WSJ ‘s infographic on forecasts for China’s growth in 2013: