The size of China's economy and its structural transition are the key factors that should be taken into consideration when observing China's economic growth instead of just looking at the number of economic growth rate set by the country, according to World Bank President Ajay Banga.
Against a weakening global economic backdrop, China's gross domestic product (GDP) surpassed 126 trillion yuan (about 18 trillion U.S. dollars) in 2023, marking a year-on-year increase of 5.2 percent. As for the year of 2024, China seeks to achieve a GDP growth rate of around 5 percent.
In an interview with China Global Television Network, Banga shared his insights on China's economic growth and its global impact, and underscored two crucial factors that need to be considered regarding the country's economic growth.
"I don't think the number is as important as you think. Remember they said around five so it could be a little below, a little above. I think what's important is two things. First, five itself is a remarkable number for an economy of this size. That is true, but China's size and the denominator effect is very different from what it was two or three decades ago. Second, I think they're going through a transformation of the economy for the future of China. The model that China used for growth for the last few decades was a model that worked at that time. They're trying to change that to a different model for the future. And that requires innovation, technology, green industries, consumption to grow," said Banga.
Acknowledging that this transition will take time for China, Banga said it is still worth noticing two things when observing China's economy.
"And I think that's a different way of growing. That transition period will take its time, but two things you should not forget when you think about China's growth. The first is that even at around 5 percent, it's still contributing 30 percent of global growth. Second, it has infrastructure in a way that most countries do not. It has 30 percent of the world's manufacturing capacity in this country. So, it's got assets. It's got a skilled workforce. It has challenges. It has an aging population. And therefore, that needs to be managed. So, it's got challenges like every other country. I'm convinced that China will work hard on both the change of the economic model, but also managing through demographic changes," said Banga.
World Bank president highlights key factors in observing China's economic growth
