China is expected to become the world’s largest economy in 2035 or earlier, a Malaysian political analyst said.
Under the leadership of President Xi Jinping, China has enjoyed both political and economic stability as well as the availability of world-leading infrastructure, said Chin Yew Sin, adviser for the Asia-Pacific region at the Global One Belt One Road Association and president of the Global Strategy Research Center.
“Based on the effective and productive policies implemented in China,” he said, China very likely can regain its position as world’s largest economy in 2035 – after a lapse of over 200 years, having lost its No 1 position in the 1800s.
Looking back in history, China was the world’s largest economy from the early 1500s until the early 1800s, Chin noted. At that time, China’s GDP accounted for around one-fourth to one-third of global GDP.
Later the United States emerged as the largest economy, and “has become the largest economy in the world for more than 130 years”.
Then China embarked on reform and opening-up in 1978. Chin noted that China’s GDP had begun to rise steadily since then, with a staggering average economic growth rate of 9 percent for over 45 years.
In 2010, China surpassed Japan to become the world’s second-largest economy, just behind the US when GDP is expressed in US dollar terms.
In 2012, China became the world’s largest trading nation measured by the sum of exports and imports of goods, according to the World Trade Organization.
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Moreover, in 2014, China became the world’s largest economy in terms of purchasing power parity, according to International Monetary Fund data.
China’s economic growth rate in 2023 was 5.2 percent, with GDP hitting $17.52 trillion, according to China’s National Bureau of Statistics, and compared with 2.9 percent growth for the US that same year, Chin said.
Chin added that high US GDP right now is not a true reflection of the strength of the US economy. He said US GDP is being driven up by the Federal Reserve’s high 5.25 to 5.5 percent interest rates, which have caused the US dollar to appreciate a lot against the renminbi.
According to Chin, US GDP will continue to shrink in 2025 and subsequent years as interest rates are steadily reduced to the previous benchmark rate of 0.25 percent from back in March 2022.
He said if China is able to maintain its average economic growth rate at 6 percent per year for the next 12 years, its GDP could double by 2035. And by that time, China should have overtaken the US as world’s largest economy.
Chin told how China had launched the Belt and Road Initiative to help countries along the Silk Road Economic Belt and 21st Century Maritime Silk Road build physical infrastructure and digital infrastructure to speed their development processes.
This had attracted many foreign investors to invest in higher-end industries such as healthcare, information technology and engineering, he said.
“Once these countries become more developed and richer, they will trade more manufactured goods and digital products from China,” he said. This would increase China’s exports to those countries and in turn enhance China’s economic growth.
According to the UN Trade & Development World Investment Report 2024, China was the world’s No 2 recipient of FDI inflows ($163 billion) in 2023, second only to the United States ($311 billion).
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When the FDIs of the Chinese mainland and Hong Kong are combined, China will surpass the US to become the world’s largest FDI receiver, Chin said. “A higher FDI in China will increase its economic growth,” he said.
