In its 12th edition on the ‘World Economic League Table-2021’, published by the UK based consultancy group,Center for Economics and Business Research (CEBR), it has been predicted that China’s economy is likely to overtake the US economy in the year 2028 to be the world’s biggest economy. The report unravels that the ongoing COVID-19 pandemic has cost GDP of $ 6 trillion in 2020.COVID-19 has adversely impacted the world economies by, build-up of national debt, decline in demand, and low supply hitting investment and productivity. During pandemic times, China has outperformed its rivals. Therefore, CEBR expects that China’s economy would surpass US economy now by 2028, five years earlier than predicted before.
China has very effectively combated the corona virus catastrophe with its strategy based on clarity, timely decision, scientific and logical approach, strict lockdown, no allegations and assistance to the world. Billions of dollars have also been earned by China in the process. Consequently, China would become an upper-income country (per capita threshold of $ 12536) now, by 2023. Rise of China as a global economic power is miraculous. It is hard to find an example in human history; the way China has lifted its 700 million people out of poverty within a period of 35 years. In year 2000, China’s share in global GDP was barely 3.6%, which has now increased to 17.8%. Here, it is relevant to highlight some of the guiding principles of China’s economic policy that propelled its economic journey towards the global giant position.
By concentrating on economic restructuring, China took up intensified efforts to adjust the development patterns of different industries, different regions, urban and rural areas. It was also endeavored by China to stabilize and strengthen agriculture as a foundation of the economy and develop the service industry. Then, the informalization of the national economy and society was also carried out.
Making reforms, opening up to the outer world and technological progress aggregately served as the driving force in economic progress of China. Institutional obstacles were broken to motivate the productive forces. Integration of education, science, and technology with the economy has been wonderful approach.
The basic starting point was making improvement in the lives of the people. Priority was given to raise people’s living standards by creating more jobs, increasing personal income, rationalizing income distribution and making improvement in the social security system.
However, the biggest initiative for China’s economy is its Belt and Road Initiative (BRI) that is a mammoth project launched in 2013, to connect Asia with Africa and Europe via land and maritime routes along six corridors. Under BR, China aims at improving regional integration through transportation, energy and infrastructure projectsthat would increase trade and stimulate economic growth. So far, over 125 countries have joined BRI. China has already spent over $ 200 billion on various BRI projects across all continents. Morgan Stanley has estimated that China’s overall expenses on BRI could be around $ 1.3 trillion by 2027. China Pakistan Economic Corridor (CPEC) is flagship project of BRI with an investment of over $ 60 billion that connects China to Pakistan’s Gowadar port on the Arabian Sea.
The most distinctive feature of China’s success story is its ‘soft power’ in sharp contrast to the Western colonialism. Certainly, China too seeks influence but by being more humanistic. China is absolutely non-interventionist and non-usurping, without any killing or destruction. By building bridges, ports, railways and highways, China is not making countries dependent but becoming interdependent while enhancing the prospects of cooperation, stability, conflict resolution and regional integration. No coercion is there on the part of China. It was Steve Job who himself decided, China never asked Apple to go to Shenzhen to produce iPhones. China has introduced its ‘soft power’ to the world without any strings attached. Unlike traditional imperial powers, China does not like to grab assets for speculation purpose. Instead, China makes foreign direct investment (FDI) by patience. Chinese come with their workers and engineers and actually do some serious work. They create a base and build and build. The time horizon of their investment is 20 to 30 years.
In a nutshell, China has the will, resolve and potential to emerge as global economic superpower by 2028, as has been predicted by the Center for Economics and Business Research (CEBR), in its recent report.
The writer is Country Manager of a Pakistani bank in Kazakhstan, with interest in Central Asian studies. He can be reached out at [email protected].