Despite China's reputation as a paragon of authoritarian efficiency, the country isn't immune to the global trend of dwindling productivity gains. The Conference Board, using adjusted economic growth estimates, figures that Chinese labor productivity rose 3.7 percent in 2015, a precipitous plunge from an average of 8.1 percent annually between 2007 and 2013


Chinese workers are miserably unproductive compared to their U.S. counterparts. The Conference Board calculates that in 2015 each employed worker in China generated only 19 percent of the amount of GDP an American worker did. That's not a whole lot better than Indian workers, who created 13 percent.


As Harry X. Wu, a development expert at Japan's Hitotsubashi University, has put it: "China needs to focus on getting more out of its available resources, rather than relying on rapid capital accumulation."

The problem is that China isn't doing particularly well on that front. Financial resources continue to be wasted on inefficient, often state-owned enterprises in bloated industries -- all those "zombie" companies in sectors like steel, coal and cement. This steals critical resources away from more productive firms. As economists at Rabobank warned in a March report, the system works against the "favorable entrepreneurial environment and Schumpeterian creative destruction" that is essential to improve productivity.''

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