Forecasting China’s Economic Trajectory in the Fourth Industrial Revolution

A leading Chinese economist has argued that China is capable of sustaining an annual growth rate of 5–6 percent over the next decade and could normalise its relationship with the United States by mid-century, provided it capitalises on the emerging opportunities associated with the fourth industrial revolution.

Justin Lin Yifu—dean of Peking University’s Institute of New Structural Economics and former chief economist of the World Bank—contends that China may be able to surmount key U.S. technological “choke points” within five years. He further projects that the country’s per capita GDP could reach roughly half of the U.S. level by 2049.

According to Lin, once China achieves this level of economic development, its broader goal of national rejuvenation will be within reach, and the bilateral relationship with the United States is likely to become more stable. Writing in the Beijing Daily, he emphasised that China retains the potential to maintain per capita GDP growth of around 8 percent through 2035, supported by productivity improvements and the advantages enjoyed by late-industrialising economies, which can draw on the experiences of earlier innovators.

Even when structural challenges—such as demographic ageing—are taken into account, Lin argued that China could still average 5–6 percent annual GDP growth to 2035, slowing to approximately 3–4 percent from 2036 to 2049. By the middle of the century, he suggested, China’s key eastern municipalities and coastal provinces could attain development levels comparable to those of the United States.

At that point, Lin asserted, China’s overall economic scale would slightly exceed that of the U.S., and its technological capabilities would be roughly equivalent—conditions he believes would diminish Washington’s ability to impose further technology restrictions.

Lin, who served as a counsellor to the State Council from 2013 to 2023, attributed contemporary pessimism about China’s growth trajectory partly to heightened U.S.–China strategic competition. He argued, however, that the United States does not hold exclusive control over the technologies China requires. Many other advanced economies possess similar capabilities and remain willing to engage in technological exchange with China.

He further claimed that China’s “whole-nation system”—which enables the government to mobilise national resources and coordinate state-owned enterprises to pursue strategic objectives—positions the country to overcome most technological bottlenecks within three to five years, even under external pressure. Lin cautioned nevertheless that China must ensure adequate resources are available to support such innovation efforts when foreign restrictions emerge.
Beijing identified “technological self-reliance” as a central priority in its proposals for the 15th Five-Year Plan, released in October after the Communist Party’s Central Committee concluded its fourth plenum.

In his commentary, Lin argued that China benefits from several advantages not enjoyed by earlier late-developing countries, particularly its alignment with the broader transformation driven by artificial intelligence, big-data analytics and human-capital expansion. He highlighted that China produces over six million STEM graduates annually—more than the combined total of the G7 countries—giving it a substantial talent advantage.

Although China continues to lag behind the United States in terms of per capita income and capital accumulation, Lin maintained that talent plays a more critical role in the current era, characterised by shorter research and development cycles and lower capital requirements. As an illustration, he noted that DeepSeek was developed by only a few hundred researchers over three to four years, requiring comparatively limited financial investment. China’s vast domestic market and comprehensive industrial base, he added, provide additional support for scaling new technologies and commercial products.

If China sustains its projected growth path and successfully addresses technological barriers, Lin predicted that U.S. high-tech companies may become increasingly reliant on the Chinese market for research, development and profitability by 2049. In such a scenario, he argued, trade would become more advantageous to the United States, whose consumers depend heavily on competitively priced Chinese products, while the economic cost of pursuing decoupling would continue to rise.