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China’s centralized economic model can facilitate the implementation of effective reforms, since the government controls large parts of the domestic economy, including the banking sector. “However, the risk of wrong political decisions has increased,” according to the Scope analysts. The rapidly growing area of shadow banks makes it more difficult to have an impact on the financial markets and the economy as a whole in the event of shocks.
“At the same time, China’s growth prospects differ from the government’s target, also due to important demographic shifts,” it said. According to the worst scenarios, the population could decrease by about 200 million people by 2050.