China Can Grow 8% for 20 Years to Become Twice U.S. Size, World Bank Says

China can grow 8 percent annually for the next two decades to become twice the size of the U.S. economy, World Bank Chief Economist Justin Lin said.

The nation can continue to exploit a “latecomer” advantage by borrowing the technologies and industries of advanced countries at low risk and cost, Lin said in a speech prepared for an event in Hong Kong today.

The world’s second-biggest economy may be twice as large as the U.S. in two decades’ time, based on so-called purchasing- power parity calculations, Lin said. Using market exchange rates, it may be the same size, he added. China’s growth averaged more than 10 percent over the past decade as the economy vaulted past Japan, Germany, the U.K and France.

China can enjoy “the advantage of backwardness’” and has “the potential to achieve another 20 years of 8 percent growth,” Lin said.

Lin, who defected to mainland China from Taiwan in 1979, endorsed China’s decision to keep the yuan steady against the dollar during the global financial crisis. He said the move helped to avert competitive devaluations between East Asian nations, which was “a tremendous contribution” to the recovery.

Global risks include surging food, commodity and fuel prices that pose a threat to social stability, “as demonstrated by events that unfolded in Tunisia and Egypt,” Lin said.

Lin was the founder and director of the China Center for Economic Research at Peking University, and became the World Bank’s chief economist in 2008. The job has also been held by former U.S. Treasury Secretary Lawrence Summers and Nobel Prize- winning economist Joseph Stiglitz.