With the U.S. and European economies entangled in a prolonged downturn, China has the chance to become the only economy posting high growth in the next decade, according to a Beijing-based think tank’s report.
China’s growth lies in urbanization, which will boost investment and consumption and protect the economy from external turmoil, said the recent report by the China Strategy think tank.
Urbanization will spur real estate and infrastructure development, which will create more job opportunities, it said.
The report said an increase in the urban population will double annual retail sales from the current 10 trillion yuan to 20 trillion yuan.
“If the targets are realized, no matter how bad the international environment will be, China’s economy will remain unaffected and step onto the track of consumption-driven growth,” the report noted.
To feed its high growth, the report predicted that China will import massive amounts of raw materials, which will eventually account for at least half of its total imports, compared with roughly 34 percent last year.
Commodity imports will eat up China’s trade surplus, which has accumulated from cheap manufacturing goods, and reverse the surplus to a deficit.
China will face grim export conditions due to a dire economic picture in Europe and escalating trade barriers in the United States.
The report said the global economic downturn will persist in the coming decade, which will send either the developing countries or emerging economies into ultra-slow growth or even a recession.