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China to become high-income country by 2023-end?

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(, Jan30’22) – After China somewhat controversially claimed on Nov 23, 2020 to have eliminated absolute poverty nationwide, two of its most influential economists have said Jan 27 that the country would reach high income status before the end of 2023 even as it continues to avail preferential treatment as a developing country under the protective umbrella of World Trade Organization rules.

Speaking at an event on “The Current Situation and Future of the Chinese Economy” organized by the China Public Diplomacy Association on Jan 27, Justin Lin Yifu, former chief economist of the World Bank and a member of the Standing Committee of the Chinese People’s Political Consultative Conference (CPPCC) National Committee, has expressed confidence that China’s economy will be able to grow around 6% in 2022.

“And the country will continue to be a driver of growth in the world in the coming decades,” China’s official Jan 27 cited him as saying.

He has predicted that China’s 1.4-billion population will walk through the threshold of becoming a high-income country either this year or next year, “which marks a landmark achievement in human history.”

“There were only two economies that had successfully made strides from low-income to high-income since the World War II – the island of Taiwan and South Korea. The Chinese mainland could be the third,” Lin has said.

Also, referring to China’s GDP per capita of around $12,551 in 2021, which is close to the level for a “high-income country” defined by the World Bank – against the global average of $12,100 – Liu Shijin, deputy director of the Economic Affairs Committee of the CPPCC National Committee, has expressed the same optimism.

“This is of symbolic significance because for a developing country, it is relatively easy to become a middle-income country. But staging on and transitioning into a high-income economy is quite difficult as most of them get mired in the ‘middle-income trap’ during the process,” Liu has said.

The forecasts of the two influential economists came after several international organizations and investment banks had downgraded China’s GDP forecasts, the report noted.

Lin was reported to have estimated that from 2019 to 2035, China still has the potential of annual 8% growth. “We have the highest savings in the world, and the [ratio] of the government’s deficit as a percentage of GDP is among the lowest… We have resources for investment, and China will be able to maintain high investment growth,” he has said, indicating more government spending.


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