Last year, China experienced its slowest economic growth in nearly three decades. The trouble seemed to start in the fall. Wage growth has cooled. Surveys show that companies in the manufacturing sector have begun shedding jobs. And imports are down, hurting other major exporting economies.
There’s more than one reason for the slowdown. A rapidly aging population, a falling birth rate, a tightening Federal Reserve, and a slowing global economy have combined to put the brakes on China’s economy. Yet Beijing cannot risk a recession. The Chinese government will not allow growth to slow significantly, even if that means storing up problems for the future.
China’s problems stem primarily from decisions made years—in some case, decades—ago. In the past, China benefitted from a growing workforce, which boosted GDP both by adding workers and because younger workers tend to be more productive than older ones. But
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