China’s economy has grown rapidly for decades, becoming a major global factory and lifting millions out of poverty. However, in recent years, growth has slowed, raising concerns about the possibility of falling into a “middle-income trap.” While it is too soon to make definitive conclusions, there are multiple factors that suggest a further slowdown in growth. These include the effects of a zero-Covid policy and a crisis in the real estate sector, high debt at local governments and state-owned enterprises, and long-term challenges such as an aging population, a mismatch in human capital, and low productivity growth. Additionally, external factors such as trade tensions and efforts by other countries to reduce dependence on imports may also negatively impact China’s economy. The 14th Five-Year Plan of the Chinese Communist Party aims to make China a “moderately developed” economy by 2035, but achieving this goal will require significant adjustments to the current growth model. There are also concerns that recent policy choices may be counterproductive in terms of increasing productivity growth.
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https://atradius.ca/reports/economic-research-china-faltering-growth-engine.html
