On July 9, 2008, the Carnegie Endowment for International Peace published a study that concluded that by 2035, China’s economy will overtake the US economy, and by mid-century it will double. In addition, economist Albert Keidel said in his report that China’s rapid growth is driven by domestic demand rather than exports, which will remain stable in the coming years.

At present, according to the Center for Economic Research, the dollar value of China’s economy is expected to exceed the value of the US economy by 2028 – five years earlier than the forecast.

According to the CEBR, as the US economy is expected to slow by 5% this year, China will narrow the gap with its main rival. Overall, global gross domestic product is forecasted to reduce by 4.4% this year, the largest annual decline since World War II.

Main reasons for the growth of the Chinese economy:

In addition to the above factors that accelerated China’s advancement in the list of leading economic countries, there is a planned economic development in China, which must be taken into account. Recall that a planned economy is an economic system in which the state owns the country’s resources and is engaged in their distribution.

• The capitalist structure of the economy allows to reduce risks everywhere and to pursue a large-scale industrial policy.
• Formation of the five-year plan has shown its effectiveness in the country over several decades and has a comprehensive impact on all spheres of life of the population.

Note that the 14^th five-year plan differs in the fact that China has not established specific numerical indicators, but indicated the main directions of development:

• promotion of urbanization by reforming the citizen registration system
• promotion of our own technologies in the world market and support of own production due to moderate protectionism
• development of markets for production factors

An interesting fact is that in this five-year period, China has reduced its emphasis on the rate of GDP growth. The priority will be new development structure based on “double circulation”.

What is double circulation?

The 14^th five-year plan with a Double Circulation puts more emphasis on the domestic market or domestic money circulation and represents China’s strategic approach to adapting to an increasingly unstable and hostile outside world.

It is expected that China will rely less on its export-oriented development strategy or external currency circulation, without abandoning it entirely.

• Social and political stability in the country is also a fundamental factor in the further development of the economy.
• While the Chinese government has always focused on stability, it is also working to adopt the best practices of other countries in many areas, including corporate management, finance and macroeconomic management.