Ever since the late 70s, China has been known as a
low-cost, high-growth phenomenon. Its economic transformation
began 30 years ago, as it emerged as a low-cost manufacturing
center. More recently, companies such as Internet
equipment maker Huawei have been competing with multinationals
at higher levels, as China looks to develop the intellectual
capital of a developed nation.
And with the economy growing at 9 percent, even in the
aftermath of the financial crisis, a middle class and consumer
culture is taking shape. While China has not crossed the
threshold from emerging to developed economy, it is getting
there very fast.
[Click here to access the complete rankings of the 2011
All-China Research Team and read the profiles of the
region's Top Analysts].
Chinas $6 trillion economy is not without its
challenges, though. Over the last year, it has grappled with
higher inflation and what many experts believe is a real estate
bubble in some markets. And despite the relative prosperity of
many urban regions, the country as a whole still has a low
per-capita income. The most fundamental and important hurdle
may be demographic, though.
Thanks to a slowing birthrate, mandated decades ago, by
Chinas one-child-per-family policy, Chinas
population is rapidly aging. While other countries, notably
Japan, are struggling with whether they will have enough
workers to support the older generations, the problem is
magnified by Chinas population of 1.3 billion, the
largest in the world. And since China is a key source of demand
for countless markets and industries around the world,
its ability to solve the problem in satisfactory way is
key to global growth.
Population growth in China over the last decade dropped to
0.57 annually, and the fertility rate of 1.5 percent is among
the lowest rates in the world, and well below the replacement
rate of 2.1 percent, the Washington Post said, citing data from
the Brookings Tsinghua Center for Public Policy in Beijing.
Over the same period, the number of people under 14 has fallen
by one third while the number of people over 60 has increased
by 20 percent, creating a scenario in which Chinas
population is expected to peak at 1.45 billion in 2029,
While Chinas economy is still on track to become the
largest in the world, other emerging markets might pace global
growth. India and Indonesia have younger populations and are
expected to grow much faster.