BEIJING — Chinese economy can grow at 6.5 percent a year during the 13th Five-year Plan (2016-2020) period, according to Justin Yifu Lin, of the Peking University’s national school of development and a former World Bank chief economist.
By 2020, China’s GDP per capita could reach $12,615, a substantial increase on the current level of $7,800, Economic Information Daily quoted Lin as saying on Dec 14.
Lin attributed his forecast to domestic demand rather than exports, noting that consumption and investment will be key to realizing these goals.
In his logic, consumption growth is based on increased revenue, and revenue relies on labor efficiency, which requires technological renovation and industrial upgrading, both of which depend on investment.
China is rich in investment resources given the Chinese government’s debt ratio stands at 56 percent of GDP, much lower than developed countries, whose debt ratio usually well higher than 100 percent, Lin said.
“China’s private savings are as high as 50 percent of national GDP,” said Lin, adding that the country also has foreign exchange reserves of $3.5 trillion.