China’s economic growth will be eclipsed by America’s rate by 2031-35
China’s rapidly aging population will be an obstacle to the country’s economic growth, which will be overtaken by the United States in the next few years, according to a leading demographer.
Fu-Xian Yi, a specialist in reproductive sciences at the University of Wisconsin-Madison and an expert on China’s demography, pointed out that the proportion of China’s population over 65 years old has increased to 15.4%. by 2023 from 7% in 1998.
“Historically, no country has achieved 4% growth in the 12 years following the elderly making up 15% of the population,” he wrote Wednesday in the magazine Project provided. “The average growth rate of high-income countries during this period was only 1.8%.”
Although the US remains the world’s largest economy, its growth rate has lagged behind China’s, even as the No. 2 economy has slowed significantly in recent years. Last year, China’s GDP grew 5.2%, compared with 2.5% in the US
But Yi sees the tide turning over the next decade and points to parallels between China’s aging population and how similar demographic trajectories have cooled the Japanese and German economies.
“Based on these historical trends, China’s growth rate will likely slow to 3% by 2028 and fall below the US level between 2031 and 2035,” he predicted.
About me, Congressional Budget Office it was expected earlier this year that US economic growth would gradually decline, falling from about 2.2% in 2025 to 1.9% in the early 2030s.
Yi added that China is also unlikely to achieve “high-income” status, based on the World Bank’s per capita income threshold. After falling just short of its 2023 level, China’s per capita income will not grow fast enough in coming years to keep pace as the benchmark increases with overall global growth.
On top of that, China’s eroding trade surplus, low interest rates and deflationary pressures will weigh on the currency, making achieving high-income status even more difficult, he said.
“Above all, China must raise household disposable income and address the demographic crisis, both of which require a political and economic reform,” Yi concluded. “Since China today is even more opposed to economic reform than it was when Deng Xiaoping introduced market-oriented reforms in 1978, rapid change is highly unlikely. The necessary transformation could take several decades, if not longer.”
Pointing to China’s aging population, veteran strategist Ed Yardeni said last year the country could become “The world’s largest nursing home.”
Meanwhile, China’s slowing growth, real estate crisis, high youth unemployment and US restrictions on key technologies have led to predictions of a the so-called lost decade of stagnation.
Leading Chinese scholar Anne Stevenson-Yangco-founder of J Capital Research, said earlier this month that “erratic and irresponsible policies, excessive control by the Communist Party and unfulfilled reform promises have created a China’s economy is at a standstill due to weak domestic consumer demand and slowing growth.
She wrote in a report that the root cause of China’s economic problems is the Communist Party’s tight control and cannot be eliminated, while strategies focus on adding more capacity. industrial force and reliance on exports are counterproductive. op-ed in New York Times.
Most economists recommend that China’s leaders loosen their grip on the private sector and promote more consumption, which would require government reform—“and that is unacceptable,” she added.
