There is every prospect of China continuing its impressive growth path with powerful domestic tailwinds, including urbanization and plenty of scope to boost per capita GDP and productivity. Compared with Japan as it stood in the 1990s - when Japan was the world's second-largest economy behind the US - is instructive. In 1995, Japan's per capita GDP was already 151% of the US (130% on a purchasing-power-parity basis); China's nominal per capital GDP remains only around 15% of the US level (28% on a purchasing-power-parity basis). In addition, Japan's urbanization rate was already 78%; China's today is 58% i.e. still 20-30% below that of high-income economies. China has a large population on relatively low incomes, and plenty of room for further urbanization and productivity gains enabling further income growth. *)
*) McKinsey Global Institute December 2018
Search By Tags:
