"First and foremost, China’s leaders expect their external surplus, mostly trade balance, to remain 2 percent of GDP through 2020, and to stay positive at least through 2025. That would mean a roughly $450 billion trade surplus in 2020, based on the GDP growth assumptions in the table. An external imbalance within 2 percent of GDP has often been considered reasonable in the context of G-20 talks about rebalancing. China will be on the verge of becoming the world’s largest economy in this time frame, however, and it is not clear that China’s G-20 partners would be willing to tolerate such a massive surplus in real terms, regardless of the GDP share. Certainly, this is not how policymakers at the White House have interpreted Chinese stated plans to “rebalance.”
Second, on the subject of GDP, the model foresees average GDP growth of 8.6 percent to 2015, and 7 percent for the 5 years thereafter. These are higher figures than other growth accounting models (e.g., Perkins and Rawski) have forecast as possible period averages; but they are not wildly divergent. This suggests that by 2020 China will be growing at around 6.5 percent annually on average.
Third, in 2020 China’s GDP (in current dollar terms, assuming 3 percent renminbi appreciation annually) will be in the order of $21.5 trillion. That would be an extraordinary gain over just 9 years, from today’s starting point of roughly $7.5 trillion. That may or may not be greater than US GDP in 2020, depending on how well the United States performs in the interim.
And finally, it is notable that the projections foresee a very impressive, aggressive shift to domestic consumption-led growth in China. Consumption now is around $3.5 trillion; consumption in 2020 would be $13 trillion. Ten trillion dollars of new domestic consumption is almost another America’s worth of consumption (of today) at the margin...."
at http://www.piie.com/realtime/?p=2761
Second, on the subject of GDP, the model foresees average GDP growth of 8.6 percent to 2015, and 7 percent for the 5 years thereafter. These are higher figures than other growth accounting models (e.g., Perkins and Rawski) have forecast as possible period averages; but they are not wildly divergent. This suggests that by 2020 China will be growing at around 6.5 percent annually on average.
Third, in 2020 China’s GDP (in current dollar terms, assuming 3 percent renminbi appreciation annually) will be in the order of $21.5 trillion. That would be an extraordinary gain over just 9 years, from today’s starting point of roughly $7.5 trillion. That may or may not be greater than US GDP in 2020, depending on how well the United States performs in the interim.
And finally, it is notable that the projections foresee a very impressive, aggressive shift to domestic consumption-led growth in China. Consumption now is around $3.5 trillion; consumption in 2020 would be $13 trillion. Ten trillion dollars of new domestic consumption is almost another America’s worth of consumption (of today) at the margin...."
at http://www.piie.com/realtime/?p=2761
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