By TRH World Desk
China Faces Risk of Long-Term Stagnation as Demographic Decline and Growth Slowdown Deepen: Ex-Kyrgyz PM
New Delhi, June 21, 2026 — China is staring at a major crisis as declining demography couples with the fading away of the tech boom. Already mired into an real estate crisis, China’s economy is gearing up for the challenge as labour cost advantage is fast vanishing.
Djoomart Otorbaev, former prime minister of Kyrgyz Republic, in an article on LinkedIn, stated that China’s crisis is real. “For nearly four decades, China’s economic success story seemed unstoppable. Hundreds of millions were lifted out of poverty. Entire industries were built from scratch,” noted Otorbaev, adding that “the country became the world’s manufacturing powerhouse and the second-largest economy on Earth.”
But history has entered a new chapter, he added. “The economic model that made China rich may reaching its limits,” stressed the China observer.
He argued that “the demographic dividend is gone. Cheap labour is disappearing.” “The gains from newest technologies are fading. Infrastructure investment no longer generates the same returns,” he added.
Otorbaev further stated that “integration into global value chains is becoming more difficult amid growing geopolitical fragmentation.” “The numbers tell a sobering story. China’s economy grew by around 10% annually in the 2000s. Growth slowed to 6–7% in the 2010s and averaged below 5% between 2020 and 2024. Some economists now project that average GDP growth could fall to just 2% between 2027 and 2040,” he added.
Otorbaev further stated that “this might not be a cyclical slowdown. It might be a structural transformation.”
“The real estate crisis, mounting public and quasi-public debt, weak domestic demand, persistent deflationary pressures, demographic decline, technological restrictions, and rising external trade barriers are no longer isolated problems,” he added.
Otorbaev stated that “together they form a complex system of constraints that challenge the foundations of China’s growth model.”
“Perhaps the most alarming statistic is demographic. Over the next decade, China could lose nearly 60 million people, equivalent to the population of France. At the same time, household consumption remains remarkably low by international standards, reflecting deep structural imbalances in income distribution, social security, and consumer confidence,” added Otorbaev.
He stressed that “the greatest risk for China is not recession. It is stagnation.”
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