That could spell bad news for the world's second-largest economy, as it draws ever closer to overtaking the United States. Lin Yifu, a government adviser and former World Bank chief economist, predicted at a government forum in March that could happen as early as 2030 — if it maintains an annual growth rate of between 5% and 6% over the next decade. An accelerated drop in the labor force could make that tough.
China's labor force could shrink by about 5% over the next decade, according to calculations by Yue Su, an economist at the Economist Intelligence Unit in London. "The likely consequent drop in the labor force, which has been falling since 2017, will place a cap on China's potential economic growth," Yue said Tuesday. "The demographic dividend that propelled the country's economic rise over recent decades is set to dissipate quickly."