China 'to Become World's Biggest Economy by 2030'

China has the potential to achieve 8 percent annual growth for the next 20 more years and overtake the U.S. as the world's largest economy by 2030, World Bank Chief Economist Justin Yifu Lin said Wednesday according to the Chinese media. He was speaking at the China Economic Development Forum in Beijing.

Lin predicted that China's per capita GDP in 2030 will be half that of the U.S., but GDP based on purchasing parity power will be twice that of the U.S. The Peter G. Peterson Institute for International Economics in January estimated that Chinese GDP based on the purchasing power was at US$14.8 trillion, already ahead of the U.S.' $14.6 trillion.

Lin said China's per capita GDP in 2008 was just 21 percent of the U.S.', similar to Japan in 1951, South Korea in 1977, and Taiwan in 1975. All these countries enjoyed rapid economic growth over the following two decades, and China will follow a similar path.

But he warned China faces many challenges, saying, "It is imperative for China to address the structural imbalances, by removing remaining distortions in the finance, natural resources and services so as to complete the transition to a well-functioning market economy." He predicted the effect of the Japanese earthquake and tsunami on March 11 will only mean short-term benefits for China.