China’s share of global output will fall over the next two decades, a leading consultancy is forecasting, upending the expectations of a generation that has only ever seen the Middle Kingdom rise inexorably in importance.
The country will account for 17 per cent of global gross domestic product, measured on a purchasing power parity basis, by 2040, below its current 19 per cent weight, according to Neil Shearing, group chief economist at Capital Economics, having peaked at 20 per cent in the mid-2020s, as the first chart shows.
The projected small but noticeable reversal in China’s dramatic rise to prominence since it opened up to the world 40 years ago is largely driven by an expected 12 per cent decline in its working-age population by 2040, depicted in the second chart.