Demographics and China’s GDP


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In 2020, China was 12% of all consumer spending in the world (and contained 17% of the
world’s population) so what happens in terms of that country’s economy is crucial to many
investment plans, both financial and corporate.
That the economy of China has been a high-growth one (as measured by GDP) is a simple
fact. The average annual growth rate for the last decade (2011 to 2021) was 6.7%. But the
China of the next decade will be very different from the China of the last decade, and the
inevitable change in the demographic profile will impact the economy’s growth rate.
Demographics, unlike economic variables, tend to be relatively stable in trend and can be
forecast with exceptionally high levels of reliability. Even a pandemic such as Covid does not
significantly change the overall future population profile. For that reason, forecasts based
on demographic trends provide an excellent underpinning to future planning. The more
variable aspects (such as trade balance) can then be overlaid on that.
This paper looks at how demographics may potentially impact the GDP growth rate of China
through to 2035 – with some long-term views to 2045 where viable and relevant. It
demonstrates how some inevitable changes to the size and growth of the labour force, as
well as skill level and resources per worker, will have significant implications for the
economy’s future growth as measured by GDP.
Given the inevitable nature of these changes, companies would be well advised to factor
them into their long-term scenarios