China Economic Analysis: The World’s Largest Economy by 2035?
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China could overtake US to become world’s largest economy if it can maintain its current rate of economic growth. Analysts predict that by 2035, Chinese economy would have grown large enough to be considered as an economic giant greater than United States. But China economic analysis reveals that this nation’s incredible growth story has been affected by global economic meltdown of 2008.
Slowdown in GDP growth
China could overtake US to become world’s largest economy if it can maintain its current rate of economic growth. Analysts predict that by 2035, Chinese economy would have grown large enough to be considered as an economic giant greater than United States. But China economic analysis reveals that this nation’s incredible growth story has been affected by global economic meltdown of 2008.
Slowdown in GDP growth
In second quarter of 2008, China GDP had clocked a growth percentage of 9.9 percent. But that has now come down to about 9 percent in third quarter 2008. Further decline in China’s GDP percentage is expected by economy analysts. Some of them expect China GDP growth to be as less as 6 percent in last quarter 2008.
Growth potential
China continues to attract a huge amount of foreign direct investments. World Bank estimated that about $80 billion worth of investments are being made in China on an annual basis. This augurs well for China’s economy. Though job losses have also taken place in certain sectors of China, like in export-oriented businesses, employment market continues to be an area of strength for this country. China has a demand of over 15 million workers annually.
China Economic Analysis: Challenges to overcome
China, unfortunately, has many challenges to overcome before it can become world’s leading economy. Corruption, particularly at local government levels, is one challenge that this nation has to face. An economic stimulus package of 4 trillion yuan had been announced by Chinese national government. For effective use of this fund, it’s important that local governments co-operate and co-ordinate with national level authorities.
Chinese government promises to adopt strong economic measure to reduce impact of global economic crisis on its nation. Adopting effective fiscal and monetary policies should help China to maintain its high rate of economic growth. China’s government has already reduced savings and loan rates to increase domestic demand. In addition to these, fuel tax and gasoline price reduction is what people in China are looking forward to.
