China’s economy may have met its 5% growth target for 2024, but experts warn that this achievement is not as rosy as it seems. The country’s economic challenges are multifaceted and far-reaching.
Firstly, tariffs imposed by President-elect Donald Trump on $500 billion worth of Chinese goods are having a significant impact on China’s exports. As manufacturers focus on emerging markets with lower demand, the sector may struggle to continue growing as a major driver of China’s economy.
Secondly, household spending remains sluggish due to low business and consumer confidence. With most people investing their wealth in property, which has led to an oversupply of homes and commercial properties, prices are forced down, and the market slump continues to affect economic growth.
Thirdly, foreign businesses are hesitant to invest in China due to uncertainty over tariffs and other geopolitical issues. This lack of investment is concerning for the government, as it needs to create sufficient jobs to ensure social stability.
These challenges will only partially alleviate the impact of potential new US tariffs, according to experts. The Chinese government must take bold measures to stabilise property markets and create jobs to prevent social unrest.
Source: https://www.bbc.com/news/articles/ceq9lxlg811o