The second-largest economy in the world has weakened in the past few years, due to high debt, an aging workforce, slower internal demand, and an ongoing crisis in the real estate sector—the force that had driven much of its explosive growth in the last few decades. These factors were compounded by the COVID-19 pandemic, with the country imposing drastic measures including its zero-COVID policy which lasted until December 2022.
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The reported growth of China’s economy in the last year, with its gross domestic product (GDP) expanding 5.2 percent according to the latest official data, doesn’t mean that the country’s troubles are over yet, according to analysts.
The second-largest economy in the world has weakened in the past few years, due to high debt, an aging workforce, slower internal demand, and an ongoing crisis in the real estate sector—the force that had driven much of its explosive growth in the last few decades.
Craig Singleton, senior China fellow at the non-partisan Foundation for Defense of Democracies, said Chinese Prime Minister Li Qiang’s latest claims on the country’s GDP “are just not credible.”
“With Chinese consumption likely to remain low, Beijing appears poised to employ an all-too-familiar playbook to address its economic challenges: cut prices and export excess capacity worldwide,” he said.
That the Chinese economy hasn’t quite recovered to pre-pandemic levels has been evident in the steep decline experienced by its stock market in the past year, a dramatic downturn that has continued in the first weeks of 2024.
This poor market performance is “reflected in lackluster growth in the profits of its listed companies but also, I suspect, growing worries about a ‘hard landing’ in the economy which could be precipitated by its struggling property sector,” Mathews told Newsweek.
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🤖 I’m a bot that provides automatic summaries for articles:
Click here to see the summary
The reported growth of China’s economy in the last year, with its gross domestic product (GDP) expanding 5.2 percent according to the latest official data, doesn’t mean that the country’s troubles are over yet, according to analysts.
The second-largest economy in the world has weakened in the past few years, due to high debt, an aging workforce, slower internal demand, and an ongoing crisis in the real estate sector—the force that had driven much of its explosive growth in the last few decades.
Craig Singleton, senior China fellow at the non-partisan Foundation for Defense of Democracies, said Chinese Prime Minister Li Qiang’s latest claims on the country’s GDP “are just not credible.”
“With Chinese consumption likely to remain low, Beijing appears poised to employ an all-too-familiar playbook to address its economic challenges: cut prices and export excess capacity worldwide,” he said.
That the Chinese economy hasn’t quite recovered to pre-pandemic levels has been evident in the steep decline experienced by its stock market in the past year, a dramatic downturn that has continued in the first weeks of 2024.
This poor market performance is “reflected in lackluster growth in the profits of its listed companies but also, I suspect, growing worries about a ‘hard landing’ in the economy which could be precipitated by its struggling property sector,” Mathews told Newsweek.
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