MADISON, WISCONSIN – Earlier this month, the ratings agency Moody’s cut its outlook on China’s sovereign credit rating to negative, citing risks from a deepening property crisis and a prolonged growth slowdown. In fact, Moody’s now predicts that annual economic growth will fall to 4% in 2024 and 2025, before slowing further, to 3.8%, on average, for the rest of the decade. Potential growth will decline to 3.5% by 2030. A major driver of this slowdown will be “weaker demographics.”

Not surprisingly, China’s leaders said they were “disappointed” with the downgrade, claiming that the economy still has “huge development resilience and potential” and will remain a powerful engine of global growth. But China’s assessment of its potential growth is based on deeply flawed forecasts.

On August 24, 2020, Chinese President Xi Jinping convened nine economists – including former World Bank Chief Economist Justin Yifu Lin – for a symposium that would guide the 14th Five-Year Plan for economic and social development. Based on that discussion, Xi declared that it was “completely possible” for China to double its GDP per capita over the next 16 years.

To continue reading, register now.

Subscribe now for unlimited access to everything PS has to offer.

Subscribe

As a registered user, you can enjoy more PS content every month – for free.

Register

Already have an account? Log in

QOSHE - China’s Economic Engine Is Running Out of Fuel - Yi Fuxian
menu_open
Columnists Actual . Favourites . Archive
We use cookies to provide some features and experiences in QOSHE

More information  .  Close
Aa Aa Aa
- A +

China’s Economic Engine Is Running Out of Fuel

30 0
22.12.2023

MADISON, WISCONSIN – Earlier this month, the ratings agency Moody’s cut its outlook on China’s sovereign credit rating to negative, citing risks from a deepening property crisis and a prolonged growth slowdown. In fact, Moody’s now predicts that annual economic growth will fall to 4% in 2024 and 2025, before slowing further, to 3.8%, on average, for the rest of the decade.........

© Project Syndicate


Get it on Google Play