CHINA IN ELITE $10,000 PER CAPITA GDP CLUB

NEW DELHI: China’s per capita gross domestic product (GDP) crossed $10,000 for the first time in 2019 and it could become a high-income economy by 2023 or 2024. The Chinese economy grew at 6.1% in 2019, its lowest GDP growth in 29 years. Yet, China’s importance in the global economy cannot be overemphasised. The Chinese economy accounts for almost 30% of the global GDP growth today.

NEWDELHI: CHINA’S per capita gross domestic product (GDP) crossed $10,000 for the first time in 2019 and it could become a high-income economy by 2023 or 2024.

The Chinese economy grew at 6.1% in 2019, its lowest GDP growth in 29 years. Yet, China’s importance in the global economy cannot be overemphasised. The Chinese economy accounts for almost 30% of the global GDP growth today. Both in terms of per capita GDP and global contribution to growth, China is now far ahead of India, although the gap has been plateauing in the recent years. (See chart 1: Ratio of China and India per capita GDP and GDP).

China’s per capita GDP reached $10,276 in 2019, according to data released by the National Bureau of Statistics. This is the first time China’s per capita GDP has crossed the $10,000 level. The 2018 per capita GDP figure was $9,771, which gives a simple annual growth of 5.2% between 2018 and 2019. A back of the envelope calculation shows that if this growth rate continues, China could become a high income economy – per capita Gross National Income of $12,376 or more – by 2023-24. So, by the time India becomes a $5 trillion economy, China could become a high income country.

The achievement has come in a year when the world’s second largest economy grew at 6.1%, the lowest in 29 years. China’s GDP numbers were released a day after US and China, the top two economies in the world, agreed to a trade deal, putting an end to 18 months of trade war including tariff and non-tariff measures.