How Advancing Women’s Equality Could Add $2.5 Trillion to China’s Growth in 2025


How Advancing Women’s Equality Could Add $2.5 Trillion to China’s Growth in 2025

Closing—or even narrowing—the global gender gap in work would not only be equitable in the broadest sense but could have far more economic impact than previously estimated, according to a new report by the McKinsey Global Institute (MGI). The study estimates that, in a best-in-region scenario in which all countries match the progress toward gender parity of the fastest-improving countries in their region, China could boost GDP by $2.5 trillion in 2025, or 20 percent higher than in a business-as-usual case.

In a theoretical full-potential scenario in which women play an identical role in labor markets as men, as much as $4.2 trillion, or 26 percent, could be added to China’s annual GDP in 2025.

China’s potential boost is the third-highest of the ten regions of the world examined by MGI after North America and Oceania at $5.3 trillion and Western Europe at $5.1 trillion, respectively.

MGI’s new report—The power of parity: How advancing women’s equality can add $12 trillion in global growth—is arguably the most comprehensive attempt to date to M. It analysed 15 indicators in 95 countries that are home to 93 percent of the world’s female population and generate 97 percent of global GDP. The indicators cover economic, social, legal, political, and physical aspects of gender equality.

MGI also calculates a Gender Parity Score (GPS) for each country, which indicates how far a country has travelled towards parity. A GPS of 1.00 indicates the country has reached full gender parity and 0.00 indicates lack of parity.

China’s aggregate GPS is 0.61, higher than the GPS for India, the Middle East and North Africa, South Asia (excluding India) and Sub-Saharan Africa. China’s GPS is about the same as that of East and South East Asia (0.62), but lower than that of other regions. The best performing region in terms of overall GPS is North America and Oceania (Australia, Canada, New Zealand, and the United States) with an aggregate GPS of 0.74.

China’s GPS on essential services and enablers of economic opportunity is on a par with developed economies. However, women in China face relatively high inequality in work, primarily driven by the gender gap in leadership and unpaid work.

“At 41 percent, China, along with Eastern Europe and Central Asia, has the highest share of women’s contribution to GDP among all regions in the world,” said Sha Sha, Director of McKinsey & Company, “However, China’s women do 2.6 times the amount of unpaid care work that men do.”

Globally, 75 percent of unpaid care is undertaken by women. Applying conservative estimates based on available data on minimum wages, this could be valued at $10 trillion per year in economic output.

Despite China’s relatively strong performance on many aspects of gender equality, effective action could have significant economic and social benefits not only within China but globally because of the number of women in China affected. China is still home to 14 million women without access to family planning. Some 28 million women in China, or some 15 percent of the global total, are affected by gender inequality in financial inclusion.

“Economic development helps countries to close gender gaps, but progress on four indicators in particular—education level, financial and digital inclusion, legal protection, and unpaid care work—could help to accelerate progress,” said Jonathan Woetzel, Director of McKinsey Global Institute, “In China as elsewhere in the world, gender initiatives need to also tackle deep-rooted attitudes and behavior in families, communities, and the workplace.”

MGI examined 75 types of intervention to tackle gender inequality and more than 150 case examples around the world. Six types of intervention are necessary to bridge the gender gap: financial incentives and support; technology and infrastructure; the creation of economic opportunity; capability building; advocacy and shaping attitudes; and laws, policies, and regulations.

Many interventions can also be pursued by private companies, on their own or in partnership with government and NGOs, and can be viewed as opportunities rather than a source of additional cost.

Beyond promoting gender diversity in their own organizations, companies can support gender initiatives in supply chains, distribution channels, and the broader community—and reap real benefits by accessing more diverse talent, reaching female consumers, and improving brand loyalty.

One promising avenue to closing China’s gender gaps in work could be to promote women in entrepreneurship through expanding access to capital combined with entrepreneurship training. In particular, action could be focused on the booming Internet economy where shops owned by women are estimated to account for 46 percent of total online transactions.

China could consider building coalitions for change that involves government, and private-sector and social-sector stakeholders coming together to act on significant gender-based issues.

About the authors Jonathan Woetzel, James Manyika, and Richard Dobbs are directors of the McKinsey Global Institute, where Anu Madgavkar is a senior fellow; Kweilin Ellingrud is a principal in McKinsey’s Minneapolis office; Eric Labaye and Sandrine Devillard are directors in the Paris office; Eric Kutcher is a director in the Silicon Valley office; and Mekala Krishnan is a consultant in the Stamford office.

Download the full report


  1. Jason Ng November 10, 2015 at 10:42:04 - Reply

    In spite of positive economic effect on the countries, how about the effects on families such as children raising, juvenile delinquency, divorces and etc? I think there would also be some negative effects on the families which eventually impact the economic and hence offset the positive impact from women equality in labor market.

  2. Karen January 18, 2016 at 21:40:20 - Reply

    I appreciate that McKinsey continues to lead in this type of research! Information like this is fundamental for change. Just out of curiosity, why aggregate Oceania with North America?

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