The Japan Center for Economic Research said China's economy will slow as a result of its zero-COVID policy, U.S. export restrictions and, over the long term, labor shortages stemming from the dwindling population.(Source photos by AP and Getty Images)
Nikkei staff writers | China
TOKYO -- China's nominal gross domestic product is unlikely to surpass that of the U.S. in the next few decades, the Japan Center for Economic Research said in an estimate, dropping a forecast last year that the world's two largest economies would switch places in 2033.
The Chinese economy will slow as a result of its stringent zero-COVID policy and stronger U.S. restrictions on exports to China, the Nikkei-affiliated think tank said Wednesday. Over the long term, labor shortages stemming from the country's dwindling population will act as a drag on its economic growth, it added.
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Now, diving into the content of the article, the Japan Center for Economic Research's estimation challenges the previously held notion that China's nominal gross domestic product (GDP) would surpass that of the United States by 2033. This shift in forecast is attributed to several key factors, each of which plays a crucial role in shaping the economic landscape.
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Zero-COVID Policy Impact: The article suggests that China's stringent zero-COVID policy is anticipated to slow down its economic growth. This policy, aimed at controlling the spread of COVID-19 within its borders, is likely to have both short and long-term implications on various sectors, influencing the overall economic performance.
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U.S. Export Restrictions: Another contributing factor is the imposition of stronger export restrictions by the United States on goods shipped to China. This move can be seen as part of broader geopolitical dynamics and trade relations between the two economic giants, impacting China's access to crucial resources and technologies.
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Labor Shortages and Demographic Challenges: The Japan Center for Economic Research underscores the long-term impact of labor shortages in China, stemming from a dwindling population. Demographic challenges, such as a declining workforce and an aging population, are expected to act as a drag on China's economic growth over an extended period.
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Nominal GDP Rankings: The central point of the article revolves around the revised estimation that China's nominal GDP is unlikely to surpass that of the United States in the next few decades. This contrasts with the earlier prediction that suggested a switch in the economic standings of the two nations by 2033.
In summary, the Japan Center for Economic Research's analysis provides a nuanced perspective on the complex interplay of factors influencing the trajectory of China's economic growth. The convergence of a zero-COVID policy, U.S. export restrictions, and demographic challenges poses significant challenges to China's ambition of becoming the world's leading economy in the foreseeable future.
