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DBS forecasts a base average real gross domestic product growth of 3 percent each year for China from 2026 to 2040, the Singapore's biggest bank by assets said on Tuesday, driven by the opposing forces of an ageing population and property downturn amid an era of AI and robotics.
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The bank noted that China is entering a new phase of growth and capital market development, shifting from scale-driven expansion towards productivity, innovation and capital efficiency, where growth is becoming more selective; while improvements in corporate governance, capital allocation and investor participation should strengthen the transmission from economic growth to shareholder returns.
As China’s economy matures and transitions towards a moderately developed economy, its securitisation rate, measured by market capitalisation as a percentage of GDP, is expected converge with those of other major markets, reaching 96 percent by 2040. Sustained earnings growth, higher return on equity supported by improved corporate governance, supportive policies, and consistent inflows from multiple investor groups should support further market expansion.
Advanced manufacturing will underpin China’s quality growth and supply-chain self- reliance, with robotics and automation, precision components among the key areas of focus, the bank said.
