China's economy will struggle to halt secular slowdown

Significance

Comparisons with two formerly fast-growing Asian neighbours, Japan and South Korea, suggest that China will continue to slow for another decade. Analysis of global growth trends over 50 years points to a strong force of ‘regression to the mean’, meaning that continued high-speed growth is statistically unlikely.

Impacts

• Continued Chinese economic slowing will reduce global demand for resources such as iron ore and coal.
• Achieving productivity growth will require deepening reforms to increase the role of the market, the private sector and competition.
• World Bank economists emphasise that imposing stricter financial discipline is a key step to enhancing market-based productivity gains.