China will become less populous, more productive—and more pricey

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China will become less populous, more productive—and more pricey
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And GDP parity with America is still decades away

on which it becomes the world’s biggest economy. The gap between American and Chinese GDP will be over $8trn in 2023, according to some forecasts. That is a bigger number than last year. According to the latest projections by EIU, our sister organisation, China may have to wait until the 2040s to overtake America.

Productivity offers far greater scope for improvement. For all its eye-catching technological feats, China is still a catch-up economy determined to assimilate knowledge from the rest of the world. American efforts to decouple from China will hurt, but not halt, its progress. China’s lagging firms also have much to learn from the country’s own leading enterprises. China’s state-owned enterprises, for example, have a lower return on assets than their private counterparts.

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