In March, Chinese Premier Li Qiang announced an ambitious economic growth target of 5% for 2024.
In a subsequent commentary, former World Bank chief economist Justin Yifu Lin endorsed the government’s target, predicting that China’s economy will grow at an average annual rate of 5-6% over the coming decade before slowing to 3-4% between 2036 and 2050. Lin also suggested that China could achieve high-income status in 2026, if not 2025. Given China’s bleak demographic outlook, this seems highly unlikely.
Lin notes that 26 countries had less than half of the United States’ gross domestic product per capita when their populations began to age. He argues that since these countries continued to improve their economies after this point, China can, too. The World Health Organization defines the start of an economy’s aging phase as the point where the share of those aged 65 and older exceeds 7% — a demographic milestone China reached in 1998. By 2023, the share of Chinese people over 65 increased to 15.4%. Historically, no country has managed to achieve 4% growth in the subsequent 12 years after the elderly made up 15% of the population. The average growth rate for high-income countries during this period is just 1.8%.