China was one of the few economies worldwide to grow in 2020, despite the challenges of the Covid-19 pandemic. Official data showed that the Chinese economy grew by 2.3% last year, and the International Monetary Fund forecasts growth of 8.1% for China this year.
Meanwhile, the U.S. economy has contracted by 3.5% by 2020, the latest government estimates show. The IMF said the US economy could grow by 5.1% this year.
Concerns about China’s growth
In a report released earlier this month, Qiao addressed common concerns that would prevent China from meeting its 2035 economic goals. She cited three reasons often cited by skeptics:
- China’s aging population will hurt its potential growth.
- China’s high debt ratio is a threat to economic stability.
- The country’s investment-driven growth model is not sustainable and cannot stimulate long-term growth.
Those concerns will slow, but not derail China’s overall growth trajectory, according to the report.
That’s mainly because the government has a number of policies in place to address the challenges, the report said. Actions include debt stabilization and initiatives to push for further urbanization and the opening up of the services sector.
Still, China’s journey to its 2035 goal isn’t without risk, Qiao told CNBC. She said that even if China enacts the promised reforms, there are many factors that the country has no control over.
The economist called further tensions between Washington and Beijing a potential threat to China’s economic growth.
Will that relationship remain sweet and … peaceful? We’re not so sure, ”she said.
Tensions between the US and China escalated during the tenure of former President Donald Trump and became one of the biggest threats to the global economy before the Covid-19 pandemic.