China’s Growth in Transition: Structural Shifts and Medium- to Long-term Prospects

Jiyoung Moon
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Jiyoung Moon: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP)

No 26-9, World Economy Brief from Korea Institute for International Economic Policy

Abstract: Since the initiation of its reform and opening-up period, China’s economy has experienced continuous high-speed growth despite multiple cycles of expansion and contraction. While China’s economic growth rate steadily declined after peaking at 14.2% in 2007, this deceleration has been stable and predictable, consistently exceeding the Chinese government’s target rate. Recently, however, China’s economic growth trajectory has reached a critical new turning point. Both external uncertainties—including intensifying U.S.-China strategic competition, persistent geopolitical tensions, and global supply-chain fragmentation—and internal downward pressures, such as delayed real-estate recovery, local government debt issues, and rising youth unemployment, have exposed the limits of the old economic growth structure and fueled the “Peak China” narrative.

Nevertheless, predictions of a sharp economic decline remain tentative. The Chinese government is actively deploying various policy efforts to create a new phase of economic growth. Major economic strategies—such as the “dual circulation strategy,” “new quality productive forces,” “consumption-led economic growth,” and “Chinese-style modernization”—along with strong policy incentives, appear well-directed toward addressing the core challenges of the economic slowdown.

Given that Korea maintains deeply interconnected cooperative relationships with China across multiple sectors, a careful examination of China’s economic growth prospects and the recalibration of bilateral cooperation directions is more important than ever. This report comprehensively analyzes the structural changes in China’s economy from supply-side-side perspectives, utilizes rigorous econometric modeling to forecast medium- to long-term growth and derives strategic implications for Korea’s economy.

Keywords: China economic growth; Growth structure; Medium- to long-term prospects (search for similar items in EconPapers)
Pages: 12
Date: 2026-04-02
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