A recent study done by the Federal Reserve highlights factors that could dramatically slow the growth of the Chinese economy in the future. China’s economy has grown by around 10 percent over the past decade, propelling the country into a global super power. However many experts predict that by 2030 growth will be closer to 6.5 percent or in the worst case slow to under 1 percent a year.
The growth of the working age population is expecting to begin declining in 2020 and the laws of diminishing marginal returns will start inhibiting growth as the country gets closer to its natural employment rate. Also the amount of workers shifting from less productive jobs like agriculture to more productive work in factories is undoubtably going to decline in coming years.
While this is bad news for the Chinese there are many ways China can avoid this decline. As long as they keep investing in technology they can continue to increase productivity indefinitely.