Economic growth in the People’s Republic of China (PRC) has moderated over the past decade, even before the coronavirus disease (COVID-19) pandemic. A critical question is to which level of gross domestic product (GDP) growth the country will return to after COVID-19 and how its long-term growth prospects are, given its rapidly aging society, a continued dependence of growth on investment, and a changed international environment.

This paper estimates the country’s potential GDP growth up to 2040 based on a Cobb-Douglas production function, estimating all input factors separately with newest available data. Many assumptions in the past, e.g., on the demographic development, have often been too optimistic, resulting in inflated growth estimates. According to our estimate, potential GDP growth averages 5.3% in 2020–2025, declining  gradually to 2.0% in 2036–2040.