What will population ageing in China change for the rest of the world?
Population ageing is now going to be rapid and drastic in China, leading to a very significant decline in China’s potential growth, from 6% in 2010, 4% currently to 2.5% in 2030, and a visible decline in global potential growth. What are the likely consequences of this trend for the rest of the world? A very marked weakening of growth in Chinese domestic demand, and therefore in exports to China, with a substantial effect on global demand (Chinese imports currently account for 12% of global imports); As Chinese pensioners are dissaving, a shift to an external deficit for China. It will therefore sell its external assets, which will drive up long-term interest rates in the rest of the world. In other words, the global equilibrium long-term interest rate will be higher due to a fall in the global savings rate (China's savings currently account for 27% of global savings); Given China's very significant weight in global commodity consumption, a fall in commodity prices .