Beijing: A new, more stable world structure may emerge if China's per capita GDP reaches half of the United States', says Prof. Yifu Lin, Honorary Dean of the National School of Development at Peking University. Lin, a former World Bank Chief Economist and Senior Vice President of Development Economics, shared his insights during a lecture organized by the China Public Diplomacy Association (CPDA) in Beijing.
According to News Agency of Nigeria, Lin addressed the theme, 'China's Medium and Long Term Development and the Significance of its Stable Growth to the World'. He noted that the world is currently facing significant changes, unseen in a century. He emphasized that with a GDP projected to reach 134.9 trillion Yuan (18.80 trillion dollars) in 2024, China could maintain growth above five per cent, contributing 30 per cent to global economic growth annually.
Lin highlighted that China's sustained development is crucial not just for the well-being of its 1.4 billion citizens but also for global economic stability and the reshaping of international governance systems. He stated that Chinese-style modernization is a significant pillar for global stability. Lin also noted that only 16 per cent of the global population currently lives in high-income countries, and once China achieves modernization, this figure could double, ushering in a new stage of global equilibrium.
While projecting China's economic future, Lin criticized the West's 'China collapse theory', noting that China has not experienced a systemic economic or financial crisis in the last 40 years. He attributed this to China's continued growth in technological innovation, industrial upgrading, and the development of new productive capacity in emerging industries. He further pointed out three major advantages for China's growth: an abundant pool of technological talent, a vast domestic market, and the most complete industrial supply chain in the world.
Discussing the future of China-U.S. trade, Lin mentioned that the risk of complete decoupling is minimal, although not entirely dismissible. He explained that certain products, such as iPhones, some chips, and photovoltaic materials, are no longer subject to tariffs because U.S. companies cannot bear the cost. Lin argued that if trade stops, the U.S. would suffer more losses than China, as high-tech enterprises in the U.S. rely on the Chinese market for profitability and technological leadership.
Lin warned against trade wars, especially for smaller countries, urging the other 85 per cent of the world's economies to unite rather than negotiate separately. He noted that while the U.S. economy is large, it only constitutes 15 per cent of the global economy. Lin cautioned that persistent trade wars could lead to a situation reminiscent of the Great Depression of the 1930s, following the 1929 stock market crash when the U.S. raised tariffs to protect domestic jobs.
He concluded by advocating for a re-establishment of a rules-based international system, suggesting that trade issues should return to the World Trade Organization (WTO) framework for dispute resolution.