China’s development towards a more open and market-based economy will lead to increased prosperity in the world’s most populous country, say TD economists in a report released today entitled China’s Bright Future.

China is the world’s second largest economy, but partly because of its status as a developing nation, it seldom garners the same attention as many industrialized countries.

“Times are changing, however, China’s economic development is continuing at a rapid pace, as is its shift from a centrally-planned economy to a market-based system,” says Craig Alexander, senior economist at TD Bank.

“China’s entrance into the WTO is a considerable achievement, and another milestone in China’s progress from a closed to an open economy.”

China’s bright outlook has important implications for the rest of the world, says TD. “China’s increased openness and rising income level will create business opportunities for exporters to tap a huge new market,” says Alexander. However, China’s development also implies increased competition from Chinese products in global markets.

China’s economy is expected to grow by 7% in 2002, by 7.5% in 2003 and at close to an 8% annual rate over the remainder of this decade, lifting its share of world economic output to 17.5% in 2010.

Participation in the WTO and reduced regulatory barriers will also fuel robust growth in China’s exports and imports, with the country’s share of world trade likely to climb from today’s 4% to 6% at the end of this decade.

“Although China faces significant hurdles, there is every reason to believe that these challenges will be overcome. Indeed, China has already come a long way in a short period of time, and the government has shown considerable resolve to stay the course,” remarks Alexander.