CBA Senior Currency Strategist, Joseph Capurso, has produced a new research report arguing that “China’s economic miracle is over” owing to slowing productivity growth and demographic headwinds. This will drag China’s growth down “from around 6% currently to around 4% by 2030”:
According to Capurso, despite the slower growth, China may still escape the so-called “middle income trap”, although there are risks to the downside:
One implication of China’s middle income status is growth in productivity will decelerate… All growth in Chinese economic growth currently comes from productivity growth. At the same time, China’s ‘demographic dividend’ has morphed into a ‘demographic tax’ because the working age population is now contracting.
