Over the next 20 years Chinas output growth is expected to b

Over the next 20 years, China\'s output growth is expected to be smaller than what it has been over the past 20 years because of:

diminishing marginal returns to capital.

the increasing complexities of raising productivity towards the level of industrialized nations.

a decrease in its labor force participation rate as the population ages.

All of the above.

Solution

All of the above.

China is developed so much in capital based goods. Hence, if more capital accumulative growth is added to that, its marginal product will fall. Hence, output would not grow as much as it had grown at such faster pace over last 20years.

Trying to immitate the production pattern of industrial nation always yield a self impediment tool in domestic growth for a specific period.

It is expected to China\'s population growth rate would fall in the future. But as par their average longevity present population will be more in the pool of working force in future. So that it can be expected that output growth will be lesser than what it has been since last 20 years.