A new study by the Federal Reserve reports that China's growth may slow drastically by 2030. According to the Fed, declining productivity and an aging population will be the causes of the booming country's eventual decline in economic robustness.

The Fed estimates that trend growth could be reduced to 6.5% by 2030, a striking contrast to the nation's 10% annual growth over the past decade.

"Most people would probably agree that the Chinese economy cannot maintain the extremely rapid growth rates it has seen over the past three decades indefinitely. The question is thus not whether the Chinese economy will slow (but) by when and by how much," wrote author Jane Haltmaier, a senior adviser in the Fed's Division of International Finance.

According to Reuters, the working age population of the country is expected to turn negative before 2020. Currently the percentage of the population over 60 is around 12; that number is expected to jump to about 25 by 2030.

Investment falls as a share of GDP and becomes less productive, employment growth is slower...and output shifts from the manufacturing to the services sector as the economy matures," Haltmaier concluded. "It should be noted that these are all in fact very reasonable assumptions."

RTTNews