China's development over the past 20 years has
been remarkable.
In a relatively narrow span of time, nearly one-quarter
of China's population left their rural homes to take advantage
of growing economic opportunities in the cities.
During this same period, the share of the population living
in extreme poverty fell from 40% to less than 1%.
We believe this is a result of Beijing's long-term plan
to create an increasingly affluent population,
supported by a services and consumption-oriented economy.
Yet, this explosion in growth has led to concerns
over China's increasing global prominence-and has fueled recent
trade disputes.
By many measures, China is still a developing economy,
and has a ways to go to achieve its goal of a level
of prosperity that is comparable with that
of more advanced economies.
In fact—assuming that the current pace of economic growth
in China evens out—we estimate that the size
of the Chinese economy could match that of the U.S. by 2036,
but because China's population is expected
to remain nearly four times the size of the U.S. population
for the foreseeable future,
China's per capita wealth could continue
to lag the U.S. Even so, as China's economy
and global influence advance over the next few years,
we anticipate long-term growth opportunities
as Beijing begins easing restrictions
and encouraging greater use of its equity
and debt markets by foreign investors.
In our view, investors who wish to benefit
from China's economic expansion should carefully consider a
diversified allocation to emerging market assets.
To learn more about how these dramatic changes
in China's economy could affect global investors,
download our Wells Fargo Investment Institute special
report: China's Place in the World.