Why China's Economy Will Slow Down Significantly in This Decade

China experienced spectacular growth in the last 30 years. However, the next 30 years will be very different due to a confluence of many factors.

China’s GDP growth rate has already slowed down from 14% in 2007 to less than 6% in 2019. In this decade, China will grow at 4% per year … IF there are no financial crises.

In the last forty years, hundreds of millions of people from rural areas moved to Chinese cities. These migrants made China into the factory of the world. This migration is now coming to an end.

The second reason for China’s slowdown is the unsustainable debt, which is now staggering THREE times the GDP. During the last 8 years of Xi Jinping’s administration, the GDP grew only 73%, while corporate, government, and especially household debts have skyrocketed.

China’s workforce is aging and shrinking. It peaked in 2017 and will have 100 million fewer workers by 2030. Of course, this means fewer workers in manufacturing and construction, two pillars of China’s economy.

This will also mean fewer consumers, fewer buyers of homes etc.

Chinese families aren’t having enough babies, even though the government now allows up to 3 children.

Last year, there only 12 million new births, the lowest number since 1961, the year of great famine. This year will be even worse.

In fact, China’s population will start to decrease within a couple of years.

In summary, unless China embraces dramatic changes in its domestic and foreign policies, its economy will continue to slow down.