Scott Kennedy
China’s economy is performing dreadfully. The post-pandemic bounce was far smaller and briefer than the Chinese government had anticipated. Despite recording a respectable, if diminished, official growth rate of 5.2 percent in 2023, the reality may have been much slower, with some analysts estimating growth was no more than 1-2 percent. Some indicators showed modest improvement in the first few months of 2024, but the economy still appears to be sputtering, with growth now highly dependent on exports.
Along with the economic slowdown has come a collapse in confidence in China’s trajectory, both at home and abroad. The quantitative data is stark, showing a sudden drop in confidence by consumers and producers in the spring of 2022 following the Shanghai lockdown. Consumers’ outlook improved briefly when the zero-COVID policies ended in late 2022 but has hovered in record-low territory since. Various indices for domestic business show a recent modest recovery, but the numbers are still far off their historic highs.
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