China's economic slowdown to intensify in 2025: World Bank report
While 2024 witnessed a rebound in services consumption and exports in the world’s second-largest economy, ongoing weakness in the property market and low consumer confidence are expected to hinder future Chinese growth.
China's economic slowdown is expected to deepen, with growth expected to fall to 4.3% in 2025 from 4.8% in 2024, according to a World Bank report published on Tuesday (October 8).
This continuous slowdown should present significant challenges for the Eastern Asia countries (PAE) which have historically benefited from its expansion, added the report.
While 2024 witnessed a rebound in consumption and exports of services in the second world economy, continuous weakness of the real estate market and low confidence of consumers should hinder future growth. While recent fiscal support may provide short-term relief, deeper structural reforms are needed for sustainable growth, the report stresses.
The analysis comes amid concerns about a lack of adequate stimulus from China. National Development and Reform Commission officials disappointed investors by refraining from announcing any new stimulus measures at a press conference on Tuesday, even as they expressed confidence in meeting this year's economic targets and promised more support.
According to a World Bank analysis, between 1995 and 2019, growing Chinese import demand contributed about 1 percentage point to annual growth in developing countries, but this figure fell to 0.67 percentage points between 2020 and 2023 as China's growth slowed. If China's growth rate slows to the projected level of 4.3% in 2025, the associated benefits to developing countries may decline, resulting in a slower growth rate of 0.14% to 0.21%.
Furthermore, if exports in China are always exceeding imports, if the import of products is increased by 4 % in comparison with an increase in imports of 2.8 % in the first seven months of this year -"In the international market According to a report that shows the negative impact of the increase in competition, it could be the benefits of increasing demand.
In addition, the investment level has played an important role in China's economic deceleration, as real estate investment has decreased by 26.7 % compared to the peak of June 2021 due to the constant questions in the real estate market. At the same time, China's manufacturing sector faces an imbalance between supply and demand, with industry-wide capacity utilization falling to 74.9% in the first half of 2024, compared with 76.7% in 2017-2019.
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