Five major hidden dangers in China’s economy in 2024
The real estate crisis, weak domestic demand, price decline, declining birth rates, and the potential variables brought about by the US election are among the major challenges facing China’s economy in 2024, according to a recent online report from Economic Perspective.
China’s economy has shown signs of recovery, with a growth rate of 5.2% last year, slightly exceeding the government’s economic growth target. However, there are still many challenges ahead for the world‘s second-largest economy.
The real estate industry is in crisis, with large real estate developers such as Evergrande facing serious debt problems, posing significant risks to the banking industry and the entire economy. Weak consumption, due in part to the depreciation of real estate holdings, is also a major concern. Furthermore, the consumer price index has fallen for the third consecutive month, raising concerns about long-term deflation.
China also faces demographic challenges, with declining birth rates and an aging population. The consequences of the decades-long one-child policy are becoming increasingly clear, with the population declining for the second consecutive year.
Geopolitical factors, particularly the US election, also pose potential risks to China’s economic development. The division between East and West camps has put pressure on Chinese industry, and the potential re-election of Trump and his tough stance on China could have significant implications.
German companies are also hoping that the Chinese government will take action to boost the economy and actively address these challenges. The lack of confidence among Chinese consumers is also a concern for international companies operating in China.
Overall, while China’s economy has shown signs of improvement, it still faces significant headwinds in 2024. The government will need to address these challenges to ensure continued economic stability and growth.