Some economists point to a shrinking workforce, stringent control by the ruling party and the middle-income trap as possible pitfalls that will prevent China from achieving its ambitions.
Stanford historian Niall Ferguson sketches a picture that points to the limits of the CCP’s extreme control over nearly every sector of the economy: Initially, that control allowed the party to significantly strengthen the economy and help it recover from sizable disasters that may have spelled certain doom for other countries – such as preventing theof Evergrande scrapping a Shanghai listing for an electric vehicle subsidiary from turning into a "Lehman moment.
But that same control may very well prevent the economy from developing the kind of innovation that could help propel China over the top. How much of a toll is up for debate. London-based consultancy firm Capital Economics also argues that China’s workforce has declined and will continue to do so by more than 0.5% by 2030,"The most likely scenario is that slowing productivity growth and a shrinking workforce prevent China ever passing the U.S.," the analysis said. CE also noted that inflation and the exchange rate will play a significant factor in deciding how the economic standoff plays out.
The most speculative argument points to the middle-income trap as the pitfall that will prevent China from achieving its ambition, according to George Manus, an associate at Oxford University’s China Centre and a senior economic advisor to UBS Investment Banking.
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