The National Balance Sheet: China's "Stock-Based Catch-Up" in the 21st Century
2021-05-20
Zhang Xiaojing Liu Lei
Source：
CHINA POLICY REVIEW
Abstract:
Over the past two decades, China’s GDP has grown from RMB 10 trillion in 2000 to nearly RMB 100 trillion in 2019. Meanwhile, national wealth stock rose from less than RMB 39 trillion to RMB 675.5 trillion over the same period. From 2000 to 2019, China’s nominal GDP registered a compound annual growth rate (CAGR) of 12.8%, while net national wealth grew at a faster pace of 16.2%, significantly outpacing both nominal and real GDP growth. Given that GDP is a flow indicator and wealth is a stock measure, this suggests that China's phase of “flow-based catch-up” has increasingly given way to a strategy of “stock-based catch-up” in its economic development.
Over the past two decades, China’s GDP has grown from RMB 10 trillion in 2000 to nearly RMB 100 trillion in 2019. Meanwhile, national wealth stock rose from less than RMB 39 trillion to RMB 675.5 trillion over the same period. From 2000 to 2019, China’s nominal GDP registered a compound annual growth rate (CAGR) of 12.8%, while net national wealth grew at a faster pace of 16.2%, significantly outpacing both nominal and real GDP growth. Given that GDP is a flow indicator and wealth is a stock measure, this suggests that China's phase of “flow-based catch-up” has increasingly given way to a strategy of “stock-based catch-up” in its economic development.
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