Tags: China | GDP | growth | plunge

Conference Board: China GDP Growth Will Plunge to 3.9 Percent in 2020-25

By    |   Tuesday, 21 October 2014 12:03 PM

Chinese economic growth, which registered 7.3 percent annualized in the third quarter, will drop to an average of rate of 3.9 percent between 2020 and 2025, according to a new Conference Board report.

The study, obtained by The Wall Street Journal, maintains that plummeting productivity and an inability of Chinese leaders to implement more thorough economic reform will hurt the economy.

The group predicts that China’s annual growth will register 5.5 percent from 2015 to 2019, compared to 7.7 percent last year.

The government has a growth target of 7.5 percent for this year, and 13 of 22 analysts in a Bloomberg survey predicted a target of 7 percent for next year.

While a sharp drop in Chinese growth would be bad news for the global economy, it could help multinational companies in China, according to the report. That's because the government would likely offer the companies "more hospitable" treatment if the economy tanks, the study says.

Chinese officials have recently been harassing U.S. companies with operations in China, including McDonald's and Microsoft.

Harvard economist Lawrence Summers and his colleague Lant Pritchett say China's growth rate will shrink over the next 20 years in a regression to mean.

"Many of the great economic forecasting errors of the past half century came from excessive extrapolation of performance in the recent past and treating a country’s growth rate as a permanent characteristic rather than a transient condition," they write in a recent paper obtained by Bloomberg.

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Chinese economic growth, which registered 7.3 percent annualized in the third quarter, will drop to an average of rate of 3.9 percent between 2020 and 2025, according to a new Conference Board report.
China, GDP, growth, plunge
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2014-03-21
Tuesday, 21 October 2014 12:03 PM
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