A Fast but Unbalanced Growth

Abstract

Over the past 35 years, since the inception of the policy of reform and opening in 1978, China has experienced an exceptionally high growth rate. Over the first decade of the twenty-first century, China recorded a growth rate in excess of 10 per cent. The world financial crisis accelerated the process which, in effect, had already been in operation for some considerable time. Over the last few years, China has stepped up a breakthrough, leading to its emergence on the global scene. According to the ‘72’ law,1 China should overtake the USA within the next 10 or 20 years (see Table 3.4). In 2011, the IMF expected that China would overtake the USA in 2016. But the computing method was said to have been biased by two factors: a miscalculation of GDP and the foreign exchange rate. In 2009, China altered the calculation method but, as the foreign exchange rate used for the calculation is the prevailing rate, the actual growth rate was grossly underestimated.