ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
China People's Congress

Bold target puts China's GDP just 25% shy of US in 2025

Road map signals America will meet its economic match soon

People in the Pudong district of Shanghai on March 5, the day the National People's Congress opened. China has set a growth target of more than 6% for 2021.   © Reuters

BEIJING -- China has laid out an ambitious growth plan that would put its gross domestic product just a quarter below the American economy in 2025, sending a forceful message that the country will emerge as an economic powerhouse rivaling the U.S.

The goal announced Friday at the session of the National People's Congress is to bring per capita GDP to the level of a "moderately developed" economy by 2035, which is estimated at about $20,000 to $30,000. Given China's population, that would mean average nominal growth of more than 6% in dollar terms each year.

Comparing this plan with projections from the U.S. Congressional Budget Office, China's economy would expand from 70% of U.S. GDP in 2020 to just 76% in 2025 and more than 85% in 2030.

This assumes that China's economy continues growing at a brisk pace. But in reality China is growing faster, meaning Beijing could catch up sooner. 

As China gains on the U.S. economically, friction between Washington and Beijing could become exacerbated. The relationship has shown little sign of improving under the administration of U.S. President Joe Biden.

"Tensions over important areas such as Taiwan and the South China Sea are even higher than they were during the end of the Trump administration," said Shi Yinhong, director of the American Studies Institute at Renmin University of China.

Chinese President Xi Jinping and his government are setting ambitious long-term goals while moving more cautiously in the short term.   © Reuters

The annual National People's Congress session in Beijing -- which has been shortened to seven days amid coronavirus concerns -- is used by the government to set out political, economic and social policy plans for the coming year. This year's gathering also saw the announcement of the new five-year plan running through 2025.

Unusually, the plan laid out Friday did not include a numeric target for average annual growth, normally a closely watched figure. It instead said growth will be maintained "within an appropriate range" and targets will be set each year based on economic conditions.

China set an economic growth target of more than 6% for 2021. This is more conservative than forecasts by international organizations such as the International Monetary Fund, which expects a post-coronavirus rebound to power an 8% expansion.

With the Communist Party's 100th anniversary coming up in July, President Xi Jinping and his government may be looking to steer clear of any unnecessary risks.

The five-year plan included new basic economic policies to help avoid relying too heavily on outside demand. It looks to expand the middle class and promote sustainable growth centered on domestic demand including consumer spending. That points to a shift away from the rapid export-driven growth of the "reform and opening up" period.

The country will also focus on research and development at home to become less dependent on American and European suppliers.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more