China to Meet Economic Goals This Year Says Justin Yifu Lin

Justin Yifu Lin, the dean of the Institute of New Structural Economics at Peking University, expressed confidence in China's ability to achieve its economic goals for this year, citing the nation's technological strengths and robust industrial framework. During a salon discussion organized by the China Public Diplomacy Association, Lin asserted that not only would China meet its current economic target as outlined in the Government Work Report, but that the nation's potential annual growth rate could reach 8 percent during the 15th Five-Year Plan period from 2026 to 2030.

The Chinese government has set an economic growth target between 4.5 percent and 5 percent for this year, with ambitions to surpass this figure. Lin emphasized the advantages that China holds in stimulating economic growth, particularly in fostering new productive forces in the economy.

Currently, China's per capita GDP stands at approximately $14,000, which still shows a stark contrast with developed nations where per capita GDP often ranges from $40,000 to $60,000. This discrepancy reflects the existing productivity gap. Lin highlighted that many of China's industries are still advancing in the catch-up phase, a position that allows them to benefit from being 'latecomers' in global economic development.

Comparatively, Lin referenced China's current development stage to historical catch-up periods experienced by Germany in the 1940s and 1950s, Japan during the 1950s and 1960s, and South Korea from the 1980s to early 1990s. Each of these countries recorded per capita GDP growth rates exceeding 8 percent for over a decade during their respective catch-up phases. Thus, Lin argued that with these contextual similarities and with the advantage of being a latecomer, China maintains the potential for sustained annual growth of 8 percent.

Furthermore, Lin emphasized a unique advantage for China that earlier catch-up countries did not possess: the opportunities presented by the fourth industrial revolution. He pointed out that while founding their industries, these nations lacked the advanced technological landscape that China's current environment offers.

Lin underscored four specific advantages China enjoys in this context. First, the country's talent pool is unmatched, generating around 6 million graduates annually in science, technology, engineering, and mathematics (STEM), making it the largest in the world.

Second, China has emerged as the largest economy under purchasing power parity (PPP) and boasts an expansive domestic market. This not only provides extensive application scenarios but also indicates diverse opportunities for innovation and growth.

Third, Lin noted that China possesses the most comprehensive industrial system globally, facilitating hardware production. This capability enables swift transformation of ideas into market-ready products, allowing for lower costs and improved competitiveness.

Finally, Lin discussed China's institutional advantages, highlighting how an efficient market dynamic incentivizes innovation among entrepreneurs and engineers. The government further engages by providing support to help businesses navigate technological and industrial challenges.

Lin concluded, combining all these strengths leads him to believe that China still possesses the potential for annual economic growth of 8 percent, extending into the 16th Five-Year Plan period. However, he cautioned that the realization of this potential will ultimately depend on prevailing domestic and international market conditions.