Core Summary
Renowned macroeconomist Gao Shanwen passed away in July 2026 at the age of 55. He was one of the most trusted macroeconomic analysts in the A-share market, revolutionizing the industry's research approach by rejecting the myth of being a "prophet" and emphasizing the limitations of macroeconomic forecasting. His works, "The Logic of Economic Operations" and "The Truth of Economic Operations," have had a profound impact. An excerpt from an article he wrote in 2019, which compared China's economic transformation with that of Japan, South Korea, and Taiwan, suggests that China's economic slowdown is structural, with future growth rates likely to drop to between 4% and 5%. China also faces challenges such as a high investment rate, rising leverage levels, and accelerating aging. Additionally, the two major drivers of growth—automotive and real estate—are entering a period of stable growth (i.e.,不再是 expanding markets).
Detailed Analysis
1. Gao Shanwen: A Trusted Macroeconomic Analyst Who Rejects Mythology
Gao Shanwen graduated from Peking University and the Central Bank's graduate program. He worked as the chief economist at Everbright Securities and Anxin Securities (later renamed Guotou Securities) and served as the president of the Peking University Finance Alumni Association. The media has described him as "one of the most trusted macroeconomic analysts in the A-share market." His analytical framework has transformed industry research methods, and he made accurate predictions at key turning points in the economic cycle (for example, he predicted in 2010 that potential growth rates would decline to 5.5% by 2020, which later proved to be reasonably accurate). However, he consistently refused to be labeled a "prophet," emphasizing the inherent limitations of macroeconomic forecasting and maintaining a pragmatic academic attitude. His book "The Logic of Economic Operations" focuses on analytical frameworks, while "The Truth of Economic Operations" addresses practical issues; both are considered classics in their field.
2. Comparing China's Development Stage to That of Japan, South Korea, and Taiwan
To analyze China's economic transformation, Gao Shanwen's team used two indicators:
- Per capita GDP: They converted China's per capita GDP into US dollars and adjusted for currency values to determine the period during which China's economy was similar to those of other countries.
- Industrial Structure: They examined the proportion of the secondary (industrial) and tertiary (service) sectors in the economy.
The analysis concluded that China's economic level in 2010 was comparable to that of Japan in 1968, South Korea in 1991, or Taiwan in 1987. This comparison served as the basis for all subsequent analyses, helping to predict China's future trajectory by observing the transformation processes of these economies.
3. Expected Growth Rates
By examining the growth rates of East Asian economies before and after their transformations, Gao Shanwen's team estimated that China's growth rate would likely fall to between 4% and 5%. These economies experienced rapid growth in the two decades prior to their transformations but then saw a gradual slowdown, eventually stabilizing at around 4%-5%. They believe this trend is likely to continue for China as well.
4. Three Major Challenges
During the transformation process, China faces three significant issues:
- High Investment Rate: China's investment as a percentage of the GDP is higher than that of Japan and South Korea, and it has decreased more slowly (by only 3 percentage points compared to a 6-percentage-point decline in those countries). This will further reduce growth rates.
- Rising Leverage Levels: Leverage refers to the proportion of debt in the economy. China's leverage increased by 55% after its transformation, while Japan and South Korea only saw increases of 20%-25%. This is due to China's reliance on infrastructure and real estate projects to stimulate growth, which has created long-term risks.
- Accelerating Aging: China's aging population (over 65 years old) is higher than that of Japan and South Korea at similar stages, and this trend is expected to accelerate. With more elderly people and fewer working-age individuals, economic growth will naturally slow down.
5. The Decline of Two Major Drivers
Two key drivers of China's economy are slowing:
- Automotive Market: China's per capita car ownership is lower than that of Japan and South Korea at similar stages, and the growth rate is expected to remain below 5%, indicating a shift from rapid expansion to stable growth (mainly due to replacement purchases rather than new demand).
- Real Estate Market: Urbanization is nearly complete, reducing the role of real estate as a driver of economic growth.
These factors indicate that China's economic slowdown is structural and not temporary.
Conclusion
Through international comparisons, Gao Shanwen clearly identified the direction and challenges of China's economic transformation. While a slowdown in growth rates is inevitable, China must be cautious about the risks posed by high investment rates, rising leverage levels, and accelerating aging. His analysis was clear and data-driven, reflecting the professionalism of a pragmatic economist. His passing is a loss to China's economic community, but his research will continue to influence the field for years to come.