Abstract
For over 30 years, China has defied predictions of the end of its economic ‘miracle’ which began in 1978 under the leadership of Deng Xiaoping. Such predictions first came to prominence from the early 1990s yet only recently have powerful, systemic threats emerged to that period of sustained economic growth that has lasted for almost five decades. China has benefitted from the demographic dividend of a low dependency ratio, compounded by China’s one-child policy which largely reduced the below working age dependency ratio. However, this exaggerated demographic dividend involved a heavy future cost in the form of the demographic cliff. The thesis of this analysis is that the demographic cliff, coupled with excessive debt accumulation since 2008, is rapidly exhausting China’s ability to sustain abnormal GDP growth. Furthermore, systemic features of CPC governance establish a default case for suboptimal decision-making, making mismanagement of the slowdown in Chinese growth likely to compound substantial downside risks to the Chinese economy in the foreseeable future.