Will the causes impede recovery?
China’s economy has not rebounded as investors or the government expected. While many economies opened up in 2022 or earlier, China stayed strictly locked down as part of its ‘zero-Covid’ policy. When the policy was hastily withdrawn at the end of 2022, the expectations were for a vigorous rebound in 2023, but those expectations have been disappointed.
Consumption has been weak. The property market continues to weigh on sentiment. Youth unemployment topped 20% before the authorities decided to stop reporting it.
Troubles for the Chinese economy matter on multiple levels. Within China, it clouds prospects for business and consumers. Politically, it is a challenge for the Communist Party. Globally, it matters because China has been the leading engine of global GDP growth for much of the 21st century. There is almost no part of the world that is not affected by the Chinese economy.
In this white paper, we consider the causes of the economic slump, policies that are being directed to tackle it and the potential trajectories for the Chinese economy going forwards.
