China’s economy will double in size between now and 2035

The annual meeting of China’s National People’s Congress (held in Beijing from 5–11 March 2022) set the annual GDP growth target for 2022 to “around 5.5% year on year”, a clear signal that Government policy is shifting from regulatory tightening and deleveraging to stimulating economic growth.

Some commentators referred to this as China saying ‘it will do whatever it takes’ to support and grow their economy. This is a very significant change in direction which is likely to see China’s economy DOUBLE by 2035.

When China says it will grow its economy by 5.5% per annum, we can be confident that this will happen, for at least four reasons:

  • China has a strong and stable Government which adopts a ‘top down’ approach to economic planning and development (ie they can turn the tap on and off to stimulate growth in the areas that need it)
  • China has the money and the market to stimulate and grow domestic consumption, irrespective of what may happen to demand in the rest of the world.
  • Previous Chinese Governments have generally met the economic targets they have set over the past 30 years
  • Unlike in more developed economies, the People’s Bank of China has plenty of room to ease monetary policy, including cutting interest rates, easing the reserve-requirement ratios for banks and drawing on cash reserves to stimulate growth

The most optimistic predictions I can find for the growth of the US economy between now and 2035 is an annual growth rate of 2.3%. Of course there are many uncertainties ahead (e.g. political gridlock, the possible return of Trump, European conflicts, rising inflation and interest rates, natural disasters etc.) but let’s assume that this is also achievable.


Based on these two projected growth rates, here is a chart showing the growth of the two economies between now and 2035:


I appreciate that economies don’t usually rise in a straight line but, based on these (albeit crude) assumptions:

  • China’s economy will double in size between now and 2035, adding to global GDP an economy equal or larger than the size of China today
  • China will overtake the US some time in 2029 (i.e. in 7 years from now) to become the largest economy in the world (previous indications suggested that this event would take place in 2027, which is still possible)
  • Chinese companies will benefit from the policy settings, economic tailwinds and fiscal stimulus that will be required from the Government to achieve these growth targets

Naturally, Chinese stock markets reacted positively to the ‘whatever it takes’ news, with many companies making new announcements about future growth prospects designed to attract new investors.

Whatever you think of China’s Government, it’s hard to deny the fact that Chinese companies will be the fastest growing in the world. Where else would you want to invest your money?

By guest writer: David Thomas, China Invest


Join Australia-Asia Forum
receive newsletter & our event promotion

"*" indicates required fields

This field is for validation purposes and should be left unchanged.