Globally, there has been marked decline in the ability of increases in capital investment and in labor to propel economic progress. These two levers are the traditional drivers of production, yet they are no longer able to sustain the steady march of prosperity enjoyed in previous decades in many economies.
China is no exception. The economy has slowed significantly, labor shortages and a capital crunch have disrupted the old growth model, and productivity has dwindled.
But long-term pessimism is unwarranted. Actually, a recent analysis by Accenture revealed that AI has the potential to add as much as 1.6 percentage points to China’s economic growth rate by 2035.