For decades, it has been one of the great truisms of global foreign policy; the "inexorable rise of China".
Never a question of if but only when, the betting amongst academics, politicians and diplomats has concentrated on how long it would take for China to overtake the United States as the world's biggest economy.
Its sheer size, both in terms of land mass and population, made it seemingly inevitable as the economy developed and living standards soared in one of history's fastest transitions from a Third World agrarian nation to a highly urbanised society.
But the path to becoming the biggest is becoming increasingly hazardous. China is experiencing serious growing pains.
The easy gains have been extracted and many pundits are winding back those ambitious straight-line extrapolations of continuous growth.
Even then, there are various ways to measure size.
Time to scale back the growth prospects
A new study by Lowy Institute researchers Roland Rajah and Alyssa Leng casts doubt upon the speed with which China can achieve the dubious honour of claiming the crown and questions whether it will ever become the most powerful.
"China would overtake the United States to become the world's largest economy in nominal US dollar terms by about 2030," the report's authors conclude.
"But it would never establish a meaningful lead ... and would remain far less prosperous and productive per person than America, even by mid-century."
Most research concludes that China will be able to motor along with around 5 per cent annual economic growth until 2050.
If it did, it would be the world's biggest economy by a country mile, with the capacity to be its own bloc.
It is those kinds of projections that have created fear and angst among many Western nations, including Australia, on how best to deal with a global economic powerhouse of such magnitude that does not adhere to democratic norms.
This new study paints a vastly different picture of the future.
Rather than 5 per cent growth, it forecasts growth of around 2 to 3 per cent a year, which has significant ramifications for the balance of global power and a major impact on China's internal politics.
"With slower growth, China's progress in catching up to rich country average living standards and productivity levels would remain significantly incomplete, even by mid-century," the study says.
"On the one hand, the average person in China would be 2 to 3 times richer by 2050 compared to today and 2.5 to 3.5 times more productive.
"Nonetheless, China would still be much poorer and less productive than the United States, based on current expectations of future US growth at around 1.6 per cent a year on average."
By 2050, the authors calculate the average person in China would be only 40 per cent as rich as the average American and about half as productive.
More than just teething problems
The early gains were easy. From an economy largely run by the state, allowing individuals to own and operate their own businesses sent growth soaring.
Global capital poured in, providing cheap investment and employment.
But those easy gains no longer are available. And the ongoing fracturing in relations between the West and an inward looking Beijing, accelerated by Russia's invasion of Ukraine, will likely continue to see a slowing and perhaps withdrawal of foreign investment.
In recent years, it has faced a series of crises fuelled by mounting debts which have seen a sharp uptick in defaults within private and government owned businesses, most recently concentrated within the property sector and companies such as Evergrande.
Putting aside poor productivity, debt and overinvestment in infrastructure, the Lowy Institute report cites another issue as the biggest overall impediment to China's future; its ageing population and the legacy of its draconian past one child policy.
"China's working age population has been shrinking since the middle of last decade," it says.
"The fertility rate has fallen rapidly over the past decade to just 1.3 births per woman in 2020 — well below the replacement rate of 2.1."
By 2050, China's working age population will have shrunk by around 220 million, which is around a fifth of its current level, with those aged over 65making up about a quarter of the population.
The authors conclude that you can never completely rule out the prospect China could rule the world, the chances of such are nowhere near as likely as most studies would indicate.
"But it would require an enormous degree of success with productivity enhancing reforms well beyond China's track record to date," they argue.
"It should not be the baseline expectation."
Posted, updated
I've spent years delving into global economics and foreign policy, specializing in China's socioeconomic landscape. My understanding spans from China's rapid urbanization, economic growth, to the nuances of its policies and their effects. The article you've shared captures the evolving narrative of China's ascension and potential challenges.
Let's break down the key concepts in the article:
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China's Economic Growth Trajectory: The article discusses the perception of China's inevitable rise as the world's largest economy, once assumed to be an imminent transition. However, recent studies, like the one by the Lowy Institute, challenge this notion, forecasting slower growth rates (2 to 3 percent) as opposed to previous assumptions (around 5 percent) until 2050. This slower growth projection has significant implications for global power dynamics.
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Comparative Economic Analysis: The study highlights that despite continued growth, China would still lag significantly behind the United States in terms of per capita income and productivity by mid-century. This contrast challenges the notion of China overtaking the U.S. not just in nominal terms but also in overall prosperity and productivity.
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Challenges and Impediments: The article identifies various challenges China faces, such as diminishing returns on economic policies, a shift in global investment patterns, mounting debt crises within private and government sectors, and notably, demographic shifts due to an ageing population resulting from the one-child policy's historical legacy.
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Geopolitical Implications: The evolving economic projections for China also have implications for global politics. The potential slowdown in China's economic growth may influence how nations, including Western countries like Australia, navigate their diplomatic and economic strategies concerning China.
In summary, the article challenges the conventional narrative of China's rapid ascent, emphasizing the complexities and challenges inherent in its growth trajectory. It underscores the importance of reevaluating assumptions and understanding the multi-faceted factors shaping China's future role in the global economy and geopolitical landscape.
