Western observers tend to focus on criticizing the rhetoric and decisions of China’s leaders. But pointing out the errors in the forecasts on which China bases its policies – which typically fail to account for unfavorable demographic trends – may be more constructive.
MADISON, WISCONSIN – Earlier this month, the ratings agency Moody’s cut its outlook on China’s sovereign credit rating to negative, citing risks from a deepening property crisis and a prolonged growth slowdown. In fact, Moody’s now predicts that annual economic growth will fall to 4% in 2024 and 2025, before slowing further, to 3.8%, on average, for the rest of the decade. Potential growth will decline to 3.5% by 2030. A major driver of this slowdown will be “weaker demographics.”
MADISON, WISCONSIN – Earlier this month, the ratings agency Moody’s cut its outlook on China’s sovereign credit rating to negative, citing risks from a deepening property crisis and a prolonged growth slowdown. In fact, Moody’s now predicts that annual economic growth will fall to 4% in 2024 and 2025, before slowing further, to 3.8%, on average, for the rest of the decade. Potential growth will decline to 3.5% by 2030. A major driver of this slowdown will be “weaker demographics.”