Shanghai, March 2025 – Danske Bank's latest economic analysis indicates that China's economic growth will experience a moderate slowdown in the coming years, until 2027. This forecast reflects the complexity of the global economic environment and the continued advancement of domestic structural transformation, marking China's economic transition from a phase of high-speed expansion to a new cycle of higher-quality development.
The Chinese economy has entered a critical stage of structural adjustment. Despite demonstrating strong resilience in recent years and effectively responding to external shocks, deep-seated factors such as demographic changes, industrial upgrading demands, and shifts in consumption patterns are driving a natural transition in growth momentum. Official policy tools continue to play a role, aimed at achieving a dynamic balance between stabilizing growth and adjusting the structure.
Key structural factors driving this slowdown include: the labor force size peaked several years ago, leading to a tightening of labor supply, which in turn constrains productivity gains and consumption potential; at the same time, the economic model is gradually shifting from reliance on investment and exports to being driven primarily by domestic demand. This process inevitably brings short-term growth pressures, especially in the stage where consumer confidence recovery and service industry upgrades are not yet fully in place.
In addition, the reshaping of the global trade landscape and the intensification of technological competition add uncertainty to China's smooth transition. The reorganization of international supply chains and the rising barriers in high-end manufacturing require China to accelerate independent innovation and industrial chain upgrades, which requires time and resource investment.
Danske Bank's Senior Economist Lars Christensen stated, "China's current economic transformation is a typical path for the development of mature economies. The focus has shifted from pursuing speed to emphasizing quality, efficiency, and sustainability." Looking back, China achieved an average annual high-speed growth of over 10% during its peak industrialization period; in recent years, the growth rate has gradually stabilized in the 5%-6% range, reflecting both cyclical fluctuations and the inevitable evolution of the development stage. Similar paths have appeared in East Asian economies such as Japan and South Korea.
To cope with this transformation, the People's Bank of China and fiscal authorities are working together to guide resources towards technological innovation, the green economy, and people's livelihoods through flexible monetary policies, targeted fiscal support, and deepening market-oriented reforms, laying a solid foundation for long-term stable growth.