Challenges for Chinese economic growth
IN THE LONG TERM, THE CHINESE ECONOMY FACES A RAPIDLY AGEING POPULATION, A SHRINKING LABOUR FORCE AND STAGNATING PRODUCTIVITY. IN ADDITION, IT MUST SEEK A NEW ENGINE OF GROWTH BEYOND INVESTMENT
IN THE SHORT TERM, CHINA’S ECONOMY IS SEEN AS ONE OF THE MOST VULNERABLE TO GROWING UNCERTAINTY DURING TRUMP’S SECOND PRESIDENCY, ESPECIALLY ADDITIONAL TARIFFS
GDP is expected to decelerate over the next few years, with y-o-y GDP growth standing at 3.6% in 2027
Slight improvement in expectations in response to the recent consumption and investment stimulus package
New fiscal support measures are expected in the coming quarters
Deflationary risks persist, as reflected in the weak CPI and producer price trends
Tariff threat and yuan depreciation
China’s strategy in the new tariff scenario:
• Weaker currency and support for exporters
• Encouragement of foreign and outward investment to strengthen its participation in regional economic development
• Long-term: boosting industrial competitiveness