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[Asia Economy Beijing=Special Correspondent Jo Young-shin] Amid concerns over the slowdown in China's economic growth rate, there is a forecast that China will be listed as a high-income country as early as this year or by next year at the latest. The World Bank (WB) classifies countries with a per capita gross domestic product (GDP) exceeding $12,696 as high-income countries.

Photo by Xinhua News Agency Capture

According to the state-run Global Times on the 28th, Lin Yifu, former Vice President of the World Bank and Standing Committee Member of the Chinese People's Political Consultative Conference (CPPCC), stated at a seminar hosted by the China Public Diplomacy Association the day before, "Since World War II, the only countries that have transitioned from low-income to high-income are South Korea and Taiwan," adding, "China will become the third high-income country this year or next year." Considering that the statistics compiled this year will be announced next year, this implies that China will become a high-income country this year.

According to data released by the National Bureau of Statistics of China on the 17th, China's GDP last year was 114.367 trillion yuan. Converted to dollars, this exceeds $17.95559134 trillion. Dividing this by the entire population of China, the per capita GDP is estimated to be around $12,551 (considering exchange rate fluctuations). China's per capita GDP first exceeded $10,000 in 2019.

Standing Committee Member Lin emphasized the significance by saying, "Currently, only 16% of the world's population is classified as living in high-income countries, but due to China, 34% of the world's population will be classified as living in high-income countries." Regarding China's economic outlook this year, he expressed confidence, stating, "China's economy can grow about 6% this year," and added, "China's economy will continue to be a driving force for global economic growth." He further noted that China's economy has the potential to grow at an annual rate of 8% until 2035.

Deputy Director Liu Sujin of the CPPCC Economic Committee also expressed optimism, saying, "There is a high possibility that China's economy will grow more than 5% this year," and "China's economy will recover from the second half of the year." Deputy Director Liu emphasized, "Most developing countries fall into the middle-income trap and fail to enter a high-income economy, but China's economy will not be like that."

The Global Times reported that the International Monetary Fund (IMF) has lowered its forecast for China's economic growth rate this year by 0.8 percentage points to 4.8%, and the World Bank also revised its previous forecast down from 5.4% to 5.1%, indicating a pessimistic outlook on China's economy.

The Global Times particularly highlighted that although overseas economic forecasting institutions and foreign media mention problems in China's real estate market, the Chinese real estate market has already peaked, and concerns about China's real estate are just that?concerns. The outlet also argued that analyses by overseas economic forecasting institutions and foreign media that COVID-19 resurgence and other epidemic prevention issues are increasing downward pressure on the economy are somewhat exaggerated.

The Global Times stated that the Chinese leadership has diagnosed that China's economy may face three pressures this year: demand contraction, supply shocks, and weakened expectations, and that fiscal and financial policies will be used to address these issues. It also reported that the Chinese government has already taken preemptive measures to stimulate the economy, such as lowering benchmark interest rates.

In Beijing, some speculate that with the 20th National Congress of the Chinese Communist Party approaching, where President Xi Jinping's reappointment will be decided, the Chinese government is likely to actively promote its entry into the high-income country category. Therefore, there is a forecast that the yuan, which has been strong against the US dollar, is likely to maintain its strong trend this year as well.