Currently, China is in the midst of a challenging transition. A rapidly aging population, increasing debt, and declining returns on fixed asset investment place new burdens on the economy. Because of aging, the labor force is expected to peak this year and begin a long decline that could reduce its size by 16 percent by 2050. By 2030, China’s dependency ratio — the percentage of the population that is not in the labor force (mostly the elderly and children) — will reach 47 percent. This is far sooner, in terms of GDP per capita, than in countries such as Japan or the United States.