China in 2031

China in 2031

by

Joe Borich, President of the Washington State China Relations Council

If there is one thing I’ve learned from my near-40 year involvement with China, it is that estimating where the Middle Kingdom will be at a point in time more than six months out is a fool’s errand. If you were to say to me in 1978 when I first visited China that 30 years hence China would lead the world in international trade, direct foreign investment, internet and cell phone users, automobile sales and number of miles of hyper-speed rail lines I would have given you wide berth as a raving lunatic. And yet, China has done all that and much, much more. So, fool that I am, let me take my best shot at forecasting China circa 2031.

China’s population will be over 70 percent urban (it is now slightly under 50 percent). During that time, China will put up more than 50 percent of all the new buildings in the world and use half or more of all the world’s construction materials produced. More than 300 new cities of more than a million people each will rise up where villages (or nothing) now stand.

It will continue to be a global leader in industrial production (it may, in fact, still be THE leader by then), but it will no longer be producing much if any of the current mix of low end, labor intensive products now churning out of Chinese factories. Those products and the factories making them will have long since migrated to southeast and south Asia and Africa, where labor and other input costs will be much cheaper. Nor will the percentage of industrial production for export be anywhere as near as high as it currently is. Instead, most of China’s industrial and agricultural output will be destined for the domestic market, which by then will be dominated by an urban middle class numbering more than 700 million.

Driving the transformation of Chinese production and consumption will be an increasingly world-class science and technology base by then in some areas rivaling our own (think clean energy, environment and new materials, for example). New industries based on scientific breakthroughs and technologies not even yet envisioned will emerge in China based in part on its own research and in part on collaborative efforts with the U.S. and other countries.

China will continue to be the world leader in energy consumption, but the mix of energy sources in play by then will reduce China’s output of greenhouse gases and other pollutants first as a percentage of GDP and then in absolute terms. Coal as a source of energy will decline from more than 70 percent currently to around 60 percent or less. Additionally, coal fired power plants will increasingly make use of advanced coal technology developed by China and in collaboration with the U.S., as well as nuclear, hydro, solar, thermal and wind power (and probably in that order of importance). China will also have by far the largest fleet of cars in the world not powered by fossil fuels. It had better, or our collective goose will be cooked by then (probably literally) since China by 2031 will have about 700 million cars and trucks on its roads. Oh, and long before that date China will have the largest network of expressways in the world.

The above, of course, rests on several assumptions. Among these are:

  • The global economy does not get wildly out of kilter, and avoids extended periods of recession/depression, or high inflation.
  • China and the developed world, led by the U.S., find sufficient common ground as China advances further and that China remains a constructive player in the global order, even as it transitions from being a rule taker to a rule maker.
  • China is not drawn into, nor does in precipitate, regional armed conflict over, for example, Taiwan or the Korean Peninsula.
  • The remarkable transformation of China’s economy over the past 30 years is matched over the next 20 by a political transformation that if not exactly Jeffersonian in its scope, at least incorporates far greater government accountability, more freedoms of expression, assembly and for the media, and judicial independence. This is not wishful thinking; I believe there are real limits on how much further China’s economic development can proceed without more political reform that would permit–even encourage–the freer exchange of ideas and effectively deal with the current sources of official corruption.

If the above assumptions prove to be correct or mostly correct, then you can take everything I said in the opening paragraphs and multiply it by at least 2, and that is probably where China will be in 2031. Whatever happens, though, we will be facing new opportunities and almost certainly enormous challenges. Of one thing we can be almost certain: China is not going away and we will need to adapt to China and its changing circumstances.