The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

China: The pitfalls of playing catch-up

China is the world’s largest-ever catch-up economy. It will soon be the world’s largest economy, period. But policymakers in Beijing face some tough choices in the years to come to cope with the strains that industrial revolution brings, writes Diana Choyleva.

 World Economic Forum special report: Contents


Diana Choyleva
Director and head of UK service
Lombard Street Research

China’s reawakening has transformed the global economy. For many centuries it was the world’s greatest. Chinese steel production in 1066, using blast furnaces, exceeded Britain’s in 1866. In 1421 a Chinese fleet of 1,000-ton ships sailed the world, south to Australia and New Zealand, east to America’s west coast. The Spanish Armada was puny compared with Kubla Khan’s attempted Japanese invasion. But China ignored the 18th and 19th century Industrial Revolution. It then failed to tackle its 20th-century weakness, culminating in the 30-year economic catastrophe of Mao’s leadership. Since 1978, China has gone down the export-led, catch-up path pioneered by Japan and Korea, with similar near-10% growth rates. The growth of GDP per capita is a huge 8% to 9%, meaning the standard of living doubles every eight and a half years. The starting point was low, however. China’s average standard of living is still only 17% to 18% of America’s, up 10 percentage points in 15 years.


You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree