Over the next five years average annual GDP growth is likely to be 9 % and in the following ten years 7 %. These more moderate growth rates over the longer-term reflect among other things the declining importance of the economic development of inland regions and exports as well as a reduction in savings. The People’s Republic will thus follow the growth pattern seen in other more advanced Far Eastern countries such as South Korea, Taiwan and Japan.
China’s long-term economic outlook: The long march to the top
Within the framework of this broadly positive scenario the economists at Dresdner Bank in a current Working Paper highlight the particularly positive outlook for the banking and financial markets. The financial sector is still among the most heavily regulated sectors. It will benefit from the forthcoming liberalization in the years ahead and make an above-average contribution to growth. The Dresdner Bank economists deem a substantial financial crisis which could drag down the real economy unlikely. The growth path outlined in the report implies a massive change in China’s role in the world economy: over the coming 15 years China will become the third-largest economic region in the world after the US and the euro area.
You can find a detailed examination of this theme in our Working Paper No. 96 “China’s long-term economic outlook: The long march to the top” at www.group-economics.allianz.com (Publications/Working Papers).
Available in German and English.