China is accelerating its contribution to global growth

China is accelerating its contribution to global growth – In current dollars, China’s contribution to world growth increased 1.48%, 7.81%, 14.99%, and 46.57% in the last four decades中國正在加快對全球增長的貢獻 by Fu Minjie 3-13-22

Fu Minjie(付敏杰) is an associate researcher at the Institute of Economics, Chinese Academy of Social Sciences

In 2022, China sets an economic growth target of around 5.5 percent, which is the lowest in the last decades. Since 2010, China’s economy has been slowing down, arousing concerns among some economists. Based on international comparative studies, Fu Minjie believes that the context of the country’s slowdown is the “lost decade” of the world economy. Moreover, from 1980 to 2020, China’s economic contribution to the global economy accelerated spectacularly and was not affected by the economic slowdown since 2010.

Key points

The ten-year average of China’s GDP growth rate decelerated from 10.38% in 2000-2010 to 7.19% in 2010-2020, a deceleration of about 30%. In the same period, the world’s economic growth dropped by 70% (current dollar) and declined by 30% (constant 2010 dollar). It reveals a common issue in the world, i.e., a sluggish economy, especially the economic stagnation in developed countries.

In current dollars, China’s contribution to world growth increased 1.48%, 7.81%, 14.99%, and 46.57% in the last four decades 1980-1990, 1990-2000, 2000-2010, and 2010-2020.

Measured in constant 2010 US dollars, China’s economic contribution to the global economy has been as high as 36.18% between 2010 and 2020, up from 4.84% during 1980-1990.

China’s contribution to world economic growth, as measured by 2017 purchasing power parity, has also been increasing. From 5.7% in 1980-1990 and 11.21% in 1990-2000, it increased to 21.94% in 2000-2010 and 28.21% in 2010-2020, although the acceleration slowed down.

The contribution made by the US to the world economy peaked in 1990-2020 and dropped by half during 2010-2020.
Summary

Since 1978, China’s economy has been deeply integrated into the global economy. According to Fu, the country’s contribution to the world economy, and thus its influence on the world, is not only credited to domestic economic policies, but also to international factors. Observing the slowdown in China’s economic growth alone tends to lead to pessimistic conclusions. Actually, the rise in China’s economic contribution and the acceleration of the technological catch-up in the post-2010 economic slowdown scenario show the strength of China’s GDP base and growth trend, which is what will underpin China’s economy for the next three decades.