Global Economic Outlook

A new long-term economic forecast from The Conference Board projects baseline Chinese GDP growth will slow to an average of 3.8% per year over the next fifteen years, lower than the 7.3% achieved over the decade before the pandemic.

Although a slowdown in economic growth is normal for maturing economies, the report, Global Economic Outlook 2025 – 2039: China Edition, finds that China is grappling with a series of downside risks that may lead to a prolonged period of below-potential growth. Structural imbalances and geopolitical headwinds will continue to constrain consumption and capital growth, and may also inflict significant damage on China’s capacity for innovation.  

While growth rates will remain higher than most advanced economies, the report forecasts that GDP growth will average 4.1% between 2025 and 2029, 3.8% between 2030 and 2034, and 3.5% between 2035 and 2039.

“Under any circumstances, we would expect China’s growth trajectory to begin to dip, as the economy enters a more mature period,” said Alfredo Montufar-Helu, who heads the China Center at The Conference Board. “China’s large state sector, the regional development divide, and consumers’ need for precautionary savings are all trends that are likely to persist over the next decade, weighing on China’s growth potential for the foreseeable future. Structural reforms to reverse this situation will take time to take effect.”

The contribution of supply-side drivers of long-term Chinese GDP growth considered in the report are:

CAPITAL INPUTS (per year, on average)

• Contributes 3.5% for the period 2025 – 2029, falling to 3.2% for the period 2030-2034, and to 2.9% for the period 2035 – 2039.
• Capital formation will continue to moderate because of falling rates of return on investment.

LABOR QUANTITY (per year, on average)

• Subtracts 0.2% for the period 2025 – 2034, falling to -0.3% for the period 2034 – 2039.
• Labor quantity will continue to drag on growth, owing to the declining working-age population.

LABOR QUALITY (per year, on average)

• Contributes 0.2% for the period 2025 – 2029, rising to 0.3% for the period 2030 – 2039.
• Labor quality will offset declining working-age population thanks to increased education levels of the labor force.

TOTAL FACTOR PRODUCTIVITY (per year, on average)

• Contributes 0.6% for the period 2025 – 2029, falling to 0.5% for the period 2030 – 2039.
• The contribution of Total Factor Productivity is estimated to gradually slow as the technological gap between China and advance economies continues to shrink.
  
  

About The Conference Board 

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