Justin Yifu Lin：China Is Expected to Join the Ranks of
High-Income Countries in Five Years
The First Great Minds China Forum and the Founding Conference of the Beijing Contemporary Economics Foundation was held on 12 September in Beijing. At the forum, Justin Yifu Lin, renowned economist and professor of Peking University said that China’s mainland may rank among high-income countries by 2020, while most developing countries may fall into the low-income or middle-income trap.
China Is Expected to Join the Ranks of High-Income Countries by 2020
Justin Yifu Lin, Professor of Peking University said that Chinese mainland may rank among high-income countries by 2020, becoming the world’s third economy after South Korea and China's Taiwan province to shift from low-income economy to middle-income economy and further to high-income economy.
According to the data released by the National Bureau of Statistics, China's per capital GDP was 6,767 USD in 2013, and the figure was 7,575 USD in 2014, representing a growth of 12 percent.
However, not all the developing countries can maintain such a growth rate. Lin also pointed out that many developing countries are facing the low-income or middle-income trap.
According to Lin, from 1950 to 2008, only 13 middle-income economies had grown to be high-income economies, among which 8 are western European countries or oil-producing countries. And the rest five are Japan and the so-called "Four Asian Tigers" in the 1970s and 1980s.
"The average annual growth of per capita GDP in developed countries is 2 percent. If the annual growth of per capita GDP of a developing country is below 2 percent, it can't narrow the gap with developed countries," Lin said.
In Lin's point of view, the per capita GDP growth of developing countries is far from satisfactory from the perspective of development economics. So far, he hasn't seen any developing countries that adopt mainstream Western development theories achieve success.
The Western Mainstream Theories Cannot Be Copied
Lin believes that over 20 years has passed and the countries that have promoted personalization, marketization and liberalization based on neo-liberalism have not been successful. Instead, they have experienced economic meltdown or stagnation and continuous crises and their average economic growth rates are even lower than the structuralism era in the 60s and 70s, with crises happening more frequently than in the 60s and 70s.
Lin said that the theories of developed countries keep changing and developing countries need to choose which developed-country theory to adopt and at the same time the theories also vary because of their restrictions.
Xia Bin, Counsellor of the State Council and Chairman of the Beijing Contemporary Economics Foundation said that in a historical period of the rise and fall of major countries, things have changed and some economic theories cannot serve the changing situations, the interpretation of which calls for innovative ideas and theories.