China was one of the few economies in the world to grow in 2020 despite the challenges posed by the Covid-19 pandemic. Official data showed that the Chinese economy grew 2.3% last year and the International Monetary Fund forecast growth of 8.1% for China this year.
Meanwhile, the US economy contracted by 3.5% in 2020, according to the latest government estimates. The IMF said the US economy could grow 5.1% this year.
Concerns about China’s growth
In a report released earlier this month, Qiao addressed common concerns that would hamper China from its 2035 economic goals. It listed three reasons that skeptics often cite:
- The aging population of China will harm its potential growth.
- China’s high debt-to-GDP ratio will threaten economic stability.
- The growth model driven by the country’s investment is unsustainable and cannot drive long-term growth.
These concerns will slow down, but not derail, China’s global growth trajectory, according to the report.
This is mostly because the government has some policies to meet the challenges, according to the report. Measures include those focused on debt stabilization and initiatives to drive more advanced urbanization and service sector opening.
Still, China’s journey toward the 2035 goal is not risk-free, Qiao told CNBC. He said that even if China fulfills the reforms as promised, there are many factors that the country cannot control.
The economist cited new tensions between Washington and Beijing as a possible threat to China’s economic growth.
“Will this relationship remain sweet and … peaceful? We’re not so sure,” he said.
US-China tensions escalated during the tenure of former President Donald Trump and became one of the biggest threats to the world economy before the Covid-19 pandemic.