China’s Moderately Growing Economy Faces Challenges and Declining Population

China’s economy experienced moderate growth last year, despite facing numerous challenges, according to recently released official figures. The growth rate of 5.2 percent, though slower than previous years, exceeded Beijing’s target of around five percent. However, this growth is a slowdown compared to the consistent six to seven percent growth observed in the past decade.

The Chinese National Bureau of Statistics attributed the country’s economic performance to the impact of the pandemic, a property crisis, and sluggish consumption. COVID-19 restrictions and a lack of confidence among households and businesses resulted in decreased consumption, while deflation persisted, further dampening spending.

Tensions with the United States and efforts by Western nations to diversify supply chains and reduce dependence on China have also exacerbated concerns about China’s economy. Furthermore, the statistics revealed an acceleration in China’s population decline, signaling a demographic crisis in the making. Rising unemployment, particularly among young people, has further strained the economy, with over one in five individuals aged 16 to 24 unemployed in May.

Despite these challenges, experts maintain a cautious optimism. Shehzad Qazi, managing director of China Beige Book, expressed disappointment with the country’s post-COVID recovery but noted that significant acceleration in the coming year would require unforeseen global improvements or more active government intervention.

China has been making efforts to attract international investors, presenting the Chinese market as an opportunity rather than a risk. However, the unstable real estate market, which has been a major driver of China’s economy, poses a significant risk. Financial troubles at prominent firms, like Evergrande, have eroded buyer trust in the sector.

Overall, while China’s economy confronts challenges, there remains a hopeful outlook for its future. However, achieving true acceleration will likely depend on global improvements or increased government intervention.

The source of the article is from the blog macholevante.com