Australian think tank - China’s economy will be ‘far less prosperous’ in coming years as headwinds intensify

 

Australian think tank - China’s economy will be ‘far less prosperous’ in coming years as headwinds intensify

• Becoming the world’s largest economy is still on the cards for China, according to the Lowy Institute, but vastly surpassing the United States is out of the question
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• Report stands in stark contrast to more bullish outlooks by some Chinese economists, but even they contend that demographic challenges and external threats pose outsized threats

China’s economy will “never enjoy a meaningful lead” over the United States and will remain far less prosperous and productive per person even by the mid-century point, though it will still become the world’s largest economy, according to a new report.

The Sydney-based think tank Lowy Institute predicts that China’s economic growth will slow sharply to roughly 3 per cent a year by 2030, and will average 2 to 3 per cent per year on average from now until 2050.

“Substantial long-term growth deceleration is the likely future for China, given the legacy effects of its uniquely draconian past population policies, reliance on investment-driven growth and slowing productivity growth,” said Roland Rajah, the lead economist at the Lowy Institute and co-author of the report.