MNI INTERVIEW2: China To Grow At 5%+ Over Next Five Years

China’s economy could still grow at an annual rate of more than 5% over the next five years if global uncertainties dissipate and domestic demand is successfully activated, driven by high-tech industries while traditional sectors continue closing the gap with their developed-economy counterparts, a high-level policy advisor told MNI.

AI-equipped robots, integrated circuits, new types of energy storage, biomedicine, aviation and aerospace, as well as the “low-altitude economy” of manned and unmanned aerial vehicles and drones, were all identified by top policymakers as new industrial pillars last week, noted Justin Lin Yifu, a member of the Standing Committee of the Chinese People’s Political Consultative Conference National Committee.

China’s large domestic market, extensive industrial base and its capacity to balance market forces with government support could allow it to lead these emerging sectors, according to Lin, adding that quantum technology, biomanufacturing, green hydrogen, nuclear fusion, brain-computer interfaces, robotic “embodied intelligence” and 6G could also present major investment opportunities within five years or sooner.

Meanwhile, many traditional sectors have yet to match those in developed countries, Lin said in an interview, though room for growth is shrinking in some industries in which China has already established leads such as electric vehicle manufacture.

“The existing technological gap with the U.S. means that China can still leverage its latecomer advantage,” said Lin, also a professor of economics at Peking University, “There are opportunities to overtake others, by utilising digital, intelligent, and green technologies to upgrade traditional industries.” (See MNI INTERVIEW: China-U.S. Frictions Could Persist Until Mid-Century)

The six emerging industries together generated roughly CNY6 trillion in 2025, about 4% of GDP, official data shows, and the National Development and Reform Commission expects this figure to grow to CNY10 trillion by 2030. Over the same period, China’s AI industry is also expected to reach a market size of around CNY10 trillion.

LATECOMER ADVANTAGE

Lin said that all this means that this year’s GDP growth target of 4.5-5% is achievable, despite rising external uncertainty, a global economic slowdown, and China’s own challenges of structural adjustment. 

China should have the potential for GDP growth averaging 8% from 2019 to 2035 under favourable conditions, according to Lin, who anticipates a significant shift in the government’s policy focus from investing in physical assets to “enhancing the capabilities and developing the potential of people,” as talent becomes a more critical factor in the Fourth Industrial Revolution.