FXStreet reports that economists at Natixis believe that growth in China will slow down significantly in the medium-term.

“Chinese growth is expected to slow as a result of: Population ageing; The shift in the capital structure to low-productive capital (in construction), as opposed to capital in capital goods; The decline in productivity gains, first of all due to the fact that it has now almost caught up with the lag in corporate modernisation; Excessive debt , which will amplify the fall in growth due to other causes; The difficulty and cost of the energy transition, from a situation where the weight of coal in electricity production is very high, and therefore where CO2 emissions are enormous.”

“In the recent period, there has been increasing state intervention in the functioning of private companies in China. These interventions explain the decline in stock market indices in China. There is concern because of the low efficiency of state-owned enterprises in China, which is well known, and because a weakening of private companies and a growing role for state-owned enterprises would result in a slowdown in productivity and total factor productivity.”