China\u2019s meteoric rise to an economic powerhouse is undeniable, however, doubts are emerging about the longevity of this rise. The geopolitical landscape is also raising concern for those who have business dealings with the world’s second-largest economy. To help get a better understanding of the economic future of China we\u2019ll look at fertility, population growth, China\u2019s GDP growth rate, and the geopolitical landscape and how that is laying a course for China’s future.<\/p>\n\n\n\n
China is the most populated country in the world, boasting a population of some 1.5 billion people. This massive domestic population has had a direct impact on the economic growth of China, the more people there are, the larger the workforce, and the more consumers to buy those products and services, it’s like a circular economy. The emerging middle class, which is estimated to incorporate some 1.2 billion people by 2027 will all need access to housing, furniture, appliances, transportation, and education for their younger generations, so the domestic growth opportunities for Chinese companies seem assured. <\/p>\n\n\n\n
China has been able to compete with a relatively large labour force advantage and the ability to grow its own industries as a result of access to a large pool of workers. However, according to Eric Zhu and Tom Orlik from Bloomberg<\/em> \u201c<\/em>Low fertility\u2014the legacy of the one-child policy, may indicate that China\u2019s working-age population<\/a> has already peaked. If fertility rates continue to remain low, it\u2019s projected that the population may shrink by more than 260 million over the coming three decades, a drop of 28%.\u201d (Zhu, Olrik) This could result in a shortage of workers and a potential slowing of economic growth. The government has responded to this trend and has eased its policy restrictions, attempting to encourage more of its people to raise families and spending less time working. China has also been investing vast amounts of resources to make its workforce smarter and more efficient to offset the decline in available workers. Although it may be too little too late to reverse this macro trend. <\/p>\n\n\n\n