The New York Fed have a blog ‘Liberty Street Economics’ and in a recent post from advisors Hunter L. Clark and Matthew Higgins they look at the reality of China achieving per-capita GDP consistent with a mid-level developed economy, such as Greece.
This is a policy goal and a target of 2035 has been set. As the post highlights though this will require growth of 6.6% per annum to get from China’s current (all in PPP) per-capita GDP of U$21,400 to U$49,300 or the 25th percentile of a ranking of developed nations. This has never been achieved by any nation at China’s present stage of development.
China’s ongoing problems have been widely discussed elsewhere and the article notes only in this regard that existing problems are now being compounded by a convulsed property complex and global post-pandemic de-risking.
Along the way they throw in the reminder that China’s official growth data may have overstated progress in the past and supply another calculation widely accepted by researchers as having validity the ‘Penn World Table‘.
Despite the difficulty of China reaching its per-capita GDP goal by 2035 the analysis ends with a constructive conclusion that’s worth posting in its entirety: “China has many compelling strengths: a well-educated population, including half the world’s trained engineers; high-quality and still-improving infrastructure and an efficient distribution system; high if uneven state capacity; and clear leads in important new technologies, including solar power, battery production, and electric vehicles. China could surprise us and achieve Xi’s lofty income growth target. But that bet comes with stiff odds.”
So, China may not achieve its per-capita GDP goals, but an ambitious target is probably better than none if forward momentum is to be maintained.
The full post is here, Can China Catch Up with Greece?
Happy Sunday.