The World Bank raised its 2024 China growth forecast to 4.9%, from 4.8% previously. In summary from the Bank's report:

  • Economic Growth Performance:

    • China's economic growth was robust at 4.8% during the first three quarters of 2024.
    • Growth has slowed since Q2 2024 due to subdued domestic demand and a prolonged property sector downturn.

  • 2024 and 2025 Projections:

    • Growth is estimated at 4.9% in 2024 and projected to moderate to 4.5% in 2025.
    • Policy easing measures are expected to provide moderate support.

  • Key Challenges:

    • Subdued household and business confidence.
    • Continued headwinds from the property sector downturn.
    • Structural constraints including:
      • Low domestic consumption.
      • High debt levels among property developers and local governments.
      • An ageing population.

  • Policy Efforts:

    • The government is providing policy stimulus to balance short-term demand support with long-term financial stability.
    • Emphasis on addressing the property sector crisis, strengthening social safety nets, and improving local government finances.

  • World Bank Perspective:

    • Mara Warwick, World Bank Country Director for China, Mongolia, and Korea, emphasizes the need for:
      • Balancing short-term growth support with structural reforms.
      • Implementing clear and specific policy measures to boost market and household confidence.
      • Unlocking sustained recovery through structural adjustments.

***

None of those "key challenges" highlighted in the report should come as any surprise. The 'World Bank perspective' )policy adive) is not surprising either.

Panda China dangerous balance