China could overtake the United States as the world’s largest economy if it maintains annual growth of eight per cent over the next 20 years, the World Bank’s chief economist said Wednesday. China, which last year overtook Japan as the number-two economy, has already set a growth target of eight per cent for 2011, and is aiming for seven per cent a year from 2011 to 2015.
“China may become the largest economy in the world by 2030,” Justin Lin told an economic forum on China development in Hong Kong, saying its economic size may then be twice as large as the US, measured by purchasing power parity. He said China has been the world’s fastest growing nation over the past two decades and grew at a “miracle” annual growth rate of 10.4 per cent between 1990-2010, a sharp contrast to the performance of other transitional economies.
The economist however warned expansion may be hampered by a weak global recovery from the financial crisis and urged the country to deal with domestic challenges such as addressing its increasing income inequality. He also said global warming may pose a “real challenge” to China’s long-term sustainability, but urged China – the world’s biggest polluter – to seize the opportunity and instead turn itself into a new leader in green technology.
My prediction is that it happens much sooner.