Report
Patrick Artus

Why GDP per employed person in China is stabilising at a much lower level than in the United States

It is normally expected that GDP per employed person will be the same in all countries over the long term. But we see that GDP per worker in China will remain at a much lower level than in the United States. How can this anomaly be explained? R&D spending is very high in China, which does not explain the anomaly described above; The level of education of the population is significantly lower in China than in the United States or the euro zone; The total investment rate is abnormally high due to the weight of construction investment, but the non-construction investment rate has been falling sharply since 2010; The institutional context (corruption, the trade-off between decisions that are favourable from an economic point of view and those linked to the desire for power, the dominant role of the Communist Party, etc.) is probably negative; Foreign direct investment inflows into China collapsed from 2022; An ageing population means a slowdown in productivity.
Provider
Natixis
Natixis

Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.

 

Analysts
Patrick Artus

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