In an article for China's Economy and Policy, the flagship publication of Gateway International, a global China consultancy firm, G. Bin Zhao, executive editor, outlines a brighter picture of China's economy in the coming decade. He advances the following arguments –

(a) By all accounts, China's economy, though not necessarily comprehensive national power, is set to overtake the United States by 2018 to 2021, even if China's growth rate drops to 5% p.a.;

(b) Already rapidly internationalized, the RMB is set to become at least one of the world's leading reserve currencies, if not the leading one, after the Chinese yuan becomes fully convertible on the capital account probably by 2020, when China's economy is to become the world's largest;

(c) Subject to deepening economic integration with the Mainland, Hong Kong is likely to overtake New York as the leading global financial centre within 20 years;

(d) Albeit noted for scale rather than global brand leadership, China's enterprises have increased their listing in the Global Fortune 500 from only 11 a decade ago to 73 companies (79 if Taiwanese companies are included). More are likely to transform into truly global leaders to take possibly up to half of the league table within two decades.

(e)  According
to China's State Intellectual Property Office, total patent
applications were more than those of Japan and the US in 2011. Meanwhile, science and technology think tank Battelle estimates that China is likely to increase her share of 15% of global research and development spending to surpass the US within a decade. The international stature of Chinese universities is expected to rise: the University of Hong Kong expected to rank among the top 10 in the world, while Peking and Tsinghua universities to rise among the top 20.

(f) China is expected to narrow the gap with the US in the aerospace industry within two decades.

Download SCMP – 17.09.12 – Brighter days ahead for China's economy

G. Bin Zhao's optimistic prognosis seems to chime with the forecast of China's looming economic dominance "possibly only years away" by Arvind Subramanian, Senior Fellow at the Peterson Institute for International Economics, Washington DC, in his new book, "Eclipse: Living in the Shadow of China’s Economic Dominance."  Click here

All these rosy predictions, of course, tend to downplay the well-known litany of critical domestic
and external challenges China faces in the coming decades, including leadership
transitions, worsening corruption, inequalities, social discontent, ecological
degradation, water, energy and other resource constraints, unbalanced reliance on infrastructural investments and low-margin exports, weakened
external markets, problematic foreign relations, a rapidly–aging
demographic profile and rising aspirations of an educated, liberal and internet-savvy middle-class.

However, past prejudgments of China’s eventual collapse have repeatedly belied themselves by predicating upon the
past, especially China's politically convulsive past. The clear present-day reality is that the Party is fast turning itself into a ruling party that can only
sustain its legitimacy by delivering what most people want, by continously re-inventing itself, and by building China's long-term competitiveness in keeping with the
changing times.

For example, a recent YaleGlobal article ""Beyond Factory Floor:
China’s Plan to Nurture Talent" dated 10 September 2012 Click here shows how determined China is in honing home-grown innovation and talent in the
coming decades.

Alongside the coming leadership transition, a raft of major reform measures is already on the cards, judging from a recent
468-page World Bank report jointly undertaken with the Development Research
Centre of the State Council, which counts Li Keqiang, China’s likely
Premier-in-Waiting, amongst its staunch supporters.These measures include the reform of state-owned enterprises, growing a green economy, tackling the "hukou"" system which marginalized migrant workers, and the promotion of civil society.

Success is by no means guaranteed and many black swans can be expected along
the way. But there is little doubt China is leaving no stone unturned in “Building
a Modern, Harmonious, and Creative High-Income Society" by 2030. Click here