At the end of last year, the ratings agency Moody’s cut its outlook on China’s sovereign credit rating to negative, citing risks from a deepening property crisis and a prolonged growth slowdown.

In fact, Moody’s now predicts that annual economic growth will fall to 4% in 2024 and 2025, before slowing further, to 3.8%, on average, for the rest of the decade. Potential growth will decline to 3.5% by 2030. A major driver of this slowdown will be “weaker demographics.”

Not surprisingly, China’s leaders at the time said they were “disappointed” with the downgrade, claiming that the economy still has “huge development resilience and potential” and will remain a powerful engine of global growth. But China’s assessment of its potential growth is based on deeply flawed forecasts.