Wry & Dry

China's GDP growth to slow to 3.5% p.a.

Whilst the world has been surprised at the slowing Chinese GDP growth (actually down to 6.9%, a little more than the forecast 6.8%), W&D was not.  Remembering former Treasurer Costello's comments that "demographics is destiny" W&D knows that China's destiny is entwined with its demographics.  And that doesn't look too good.

And this has been confirmed by those gurus at Global Demographics.  This is important, readers, so W&D will quote directly from its recent report:

With the IMF recently changing its forecast of China’s GDP growth for 2015 to 6.8% there has been much surprise expressed.  Yet one of the most significant determinants of the trend of a country’s GDP, demographics, has been indicating this downward trend for some time now and it should not really be a surprise. 

Furthermore, the same factors indicate that for the decade 2015 to 2025 the average compound growth rate will fall to 4.5% per annum (although short term stimulus can move year-on-year growth rates around that trend).

W&D suggests that readers go directly to Global Demographics' report [2].  But if that detail doesn't float your boat, the short story is essentially about the decline in the total work force and decline in the growth rate of productivity.