A prominent economist warns that without significant market reforms, China's growth rate could fall to as low as 2.5%, with struggles to maintain growth above 4%.
According to Zhou Tianyong, a notable economist and former deputy head of the Central Party School’s Institute of International Strategic Studies in Beijing, China is on a concerning trajectory regarding its economic growth. He emphasizes that without substantial market reforms, the country's potential growth rate could decline to approximately 2.5% in the coming years. Zhou notes that the current conditions hinder productivity and consumer spending, crucial elements for economic expansion.
In his assessments for China's 15th five-year plan period, which spans from 2026 to 2030, he foresees a daunting landscape unless there is a meaningful turnaround in total factor productivity alongside an increase in household consumption. As per Zhou's observations, sustaining growth rates above 4% will be challenging without these critical changes, pointing to the need for immediate policy action focusing on both productivity enhancements and policy adjustments conducive to consumer spending growth.
Zhou's analysis shines light on the broader implications for China's economy, suggesting that its strategies must pivot towards fostering a consumer-centric market, enhancing both efficiency and spending power among households. The call for urgent reforms echoes the sentiment of economic unease among top economists and serves as a stark reminder of the potential risks facing one of the world's largest economies if reforms are delayed.
