RBA forecasts Chinese economy will slow down to 3% by 2030

The Reserve Bank of Australia sees China’s economic growth halving to around 3% by 2030 as low birth rates, efforts to wind back corporate debt and low productivity combine to slow its expansion, according to Bloomberg.

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Bloomberg has reported that the RBA’s Ivan Roberts and Brendan Russell has contributed to a research paper, arguing “China’s period of ‘above-normal’ growth is drawing to a close”.

“This will create challenges for policy makers, as they attempt to foster continued increases in incomes, while forestalling risks arising from high levels of debt.”

China’s annual GDP rose 10.6% in 2010, but has steadily slipped as authorities sought to switch the drivers of growth to consumption from investment.

Given policy makers’ commitment to re-balancing and the difficulties of reversing China’s population dynamic, the RBA economists see greater productivity, particularly through technological innovation, as key to supporting China’s economy.