Key points of the Chinese economy development in the next 10 years
UBS Investment Bank analyzed the development of the Chinese economy, and based on the data obtained, made a 10-year forecast. According to experts, during this time the country’s GDP should grow twice as much as domestic consumption. In this case, the economy will be affected by adverse global factors, but not significantly. First of all, growth rates in China depend on domestic consumption.
Over the last 10 years China has been actively working to reduce dependence of the local economy on exports. The activities carried out have yielded results, and after the pandemic, the local market has started to increase its turnover in order to achieve its earlier goals. As a result, the economy grew by 5.5% in the second half of 2020. According to experts’ forecasts, this year the development rate may overcome the 7.6% mark. This indicator is the maximum for the country and was observed in 2013. However, after the dynamics will begin to decline. On average, within 10 years the GDP growth will make about 4.5% annually. And even with this decline, China will show better rates than other leading economies. China will remain one of the main drivers of global economic growth, taking a share of about 30%.
According to forecasts, by 2030 the country will be able to double its current GDP indicators. In 2019, the Chinese economy exceeded the amount of 14 trillion dollars. By 2030, the WFP should reach the threshold of 26-28 trillion dollars. And the key factor of growth will be domestic consumption, for which the government has high hopes. Due to the reorientation of the market it was possible to increase local demand, which contributed to an increase in activity on the part of the Chinese population and the development of the service sector. As a result, domestic consumption increased from $2.6 trillion in 2009 to $8 trillion in 2019. It is predicted that this figure will amount to $17 trillion in the next decade.
In turn, the increased demand in the domestic market will reduce the number of poor people and increase the share of the middle class. Now in China, about 600 million people have an income of only 1650 dollars a year. If in 2009 the number of families that earn about 15 thousand a year was 130 million people, in 2019 they were 620 million. It is assumed that in 2030 this figure will be 900 million. Those Chinese, who have an income of more than 30 thousand per year per family, in 2030 will be 680 million people against 280 million that is now.