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Experts say China has entered the threshold of the middle-class developed countries
In New York, some of China's leading economic experts recently emphasized that over the last decade, China has undergone unprecedented economic growth, transitioning from a developing nation to the brink of becoming a mid-level developed country. Looking ahead, after another decade of progress, China could officially join the ranks of fully developed nations. Between 2003 and 2011, China's economy expanded at an annual average rate of 10.7%. By 2011, China's GDP had reached 47.2 trillion yuan, marking a more than 1.5-fold increase compared to 2002. Globally, China's economic standing has remained strong, and by 2010, it had become the world's second-largest economy. That same year, China's per capita GDP reached 35,000 yuan, equivalent to $5,432 USD when calculated using the average exchange rate. Based on the World Bank's 2011 classification, China now qualifies as a "middle-upper income country."
According to Mao Zhenhua, director of the Economic Research Institute at Renmin University of China, who spoke at the 3rd Columbia University China Outlook Forum in New York, the past decade has seen China's economy grow at an impressive pace, with an average rate of 10.7%. During this time, China has emerged as the world's second-largest economy and the largest exporter of goods. Mao noted that the past decade has been marked by a peak in China's demographic dividend, rapid urbanization, significant advancements in science and technology, and a relatively stable global environment, all of which have contributed to China's economic surge.
However, as China moves closer to becoming a mid-level developed nation, challenges such as rising labor costs, shifting demographics, diminishing demographic dividends, and a less supportive international trade landscape are emerging. These factors are beginning to reverse the conditions that once fueled China's rapid economic expansion. With China now the world's second-largest economy, there is a growing need to focus on domestic markets and increase household consumption's share of GDP.
Mao Zhenhua explained that while China's transition into a mid-level developed country will continue to support relatively robust growth, it will also lead to a more sustainable and normalized development trajectory, similar to other developed nations. This means enhancing social welfare systems, improving labor conditions, and relying more on domestic consumption. As this shift occurs, China's economic growth will moderate, and the proportion of exports to GDP will likely decrease. Over time, this process could position China as the world's largest economy.
The OECD's recent report, "Vision 2060: A Long-term Global Growth Outlook," suggests that China might surpass the U.S. as the largest economy as early as 2016. However, Mao Zhenhua believes that this milestone is more likely to occur between 2019 and 2022. To be considered a developed country, nations typically exhibit advanced technology, high living standards, and robust industrialization. Currently, the United Nations recognizes 44 countries or regions, including the U.S., Japan, Germany, and others, as developed nations.