Why China has passed its economic growth peak

Investors and stock markets have become very excited with China's "reopening" after its abandonment of the zero-Covid policy at the end of 2022. Nobody knows how many people died after more than 80% of the population was declared to have caught the coronavirus, but there have been clear signs of economic revival after three years of drastic lockdowns. Does that mean China will return to the high growth rates of recent decades?

While its growth will undoubtedly recover to impressive rates in the short term, there is good reason to think that China's era of miraculous economic expansion is now behind us. This is due both to structural issues that cannot easily be addressed and to policy mistakes that could be, but have not been fixed so far.

First, the structural problems. Long-term economic growth depends mostly on three factors: growth of labor supply, efficiency of...