Which of the following statements accurately describes catch-up growth? In one generation, China will be one of the richest countries in the world if China’s GDP per person continues to grow 9% per year. In one generation, Zimbabwe will be the world’s richest country since Zimbabwe’s per person GDP grew 9% in the last couple of decades. In one generation, Zimbabwe will be one of the middle-income countries since Zimbabwe’s per person GDP fell by 27% in the last couple of decades. In one generation, even if China’s GDP per person declines 9% per year, China will remain one of the richest countries in the world
The Correct Answer and Explanation is:
The correct statement is: In one generation, China will be one of the richest countries in the world if China’s GDP per person continues to grow 9% per year.
Explanation:
Catch-up growth refers to the process by which poorer countries or regions grow more quickly than wealthier ones, often because they can adopt existing technologies and processes that have already been developed elsewhere. This allows them to increase productivity and income levels at a faster rate. In the context of economic growth, if a country’s GDP per person grows rapidly, it can narrow the gap with wealthier countries, especially if that country is starting from a relatively low base.
China’s economy has been experiencing rapid growth for decades, with annual GDP growth often exceeding 9%. If this trend continues, China could indeed become one of the richest countries in the world in terms of GDP per capita within a generation. This aligns with the concept of catch-up growth, where developing economies are able to rapidly close the income gap with more developed economies.
The other statements do not accurately describe catch-up growth:
- Zimbabwe’s recent growth: Although Zimbabwe’s GDP per person may have grown by 9% over the past couple of decades, this does not guarantee it will become the richest country in the world. Economic conditions, political stability, and other factors also play a crucial role in sustained growth.
- Zimbabwe’s per person GDP decline: The statement about Zimbabwe’s per person GDP falling by 27% is a sign of economic regression, not catch-up growth. This would lead to further impoverishment rather than growth.
- China’s GDP per person decline: If China’s GDP per person were to decline by 9% per year, it would not remain one of the richest countries. A long-term decline would likely reduce China’s economic standing in global rankings. Catch-up growth only occurs when there is consistent growth, not a decline.
In summary, catch-up growth is characterized by rapid increases in GDP, particularly in countries with lower starting income levels. Therefore, China’s continued growth of 9% per year would likely propel it to become one of the wealthiest nations in the world.
