Disastrous economic trends hit Xi’s China hard

Once believed to be a stranglehold on the United States, China’s economy is losing steam compared to its geopolitical rivals.

The world’s second-largest economy is now two-thirds the size of Washington last year, down from 70% a year ago and 76% in 2021, the World Bank said in an official government report. It is estimated that there are.

The country’s recovery from years of anti-virus measures during the COVID-19 pandemic has been weaker than some analysts expected, but months of gradual lockdowns left the country on the brink. The real estate market was hurt by a decline in foreign direct investment.

Experts said China needs to maintain a minimum annual GDP growth rate of 5% to eventually replace the United States as the No. 1 economic power.

China, which has recorded double-digit growth in the first two decades of this century, likely hit that 5% threshold last year, according to major financial institutions such as the International Monetary Fund. However, it is predicted to remain at 4.6% in 2024.

Economic analysts have previously noted that Chinese leader Xi Jinping’s 2022 Communist Party National Congress report includes less bullish indicators based on per capita income rather than overall GDP. This is a departure from the lofty goals announced two years ago. We will double both GDP and GDP per capita within a decade and a half.

Chicago-based economic analyst Howes Song said at the time that Beijing appeared to be “quietly abandoning its ambitions” to overtake the United States and become the world’s top economic power.

China’s nominal GDP (GDP not adjusted for inflation) in 2022 is valued at $17.96 trillion, equivalent to 70.6% of the United States’ $25.44 trillion.

At a regular press conference in early January, Chinese Foreign Ministry Spokesperson Wang Wenbin said, “The fundamentals that support China’s steady growth in the long term have not changed, and the world has shown confidence in China’s economy this year.” Told.

He pointed to comments from IMF China Director Stephen Barnett, who predicted that China’s economy would experience “healthy growth” this year and continue to account for a third of global economic activity.

China watchers are skeptical of official economic statistics released by the Chinese government.

In 2007, China’s late former prime minister and economic reformer Li Keqiang admitted that the government’s GDP data was “artificial” and unreliable, according to diplomatic cables published by WikiLeaks.

The Chinese embassy in Washington, D.C., did not immediately respond. newsweek‘s written request for comment.

Concerns persist despite the government’s vigilant censorship and efforts to remove conversations about poverty from China’s internet. Adam Posen, director of the Peterson Institute for International Economics, wrote in a magazine last fall that people and businesses alike are holding on to cash instead of spending it or investing it. foreign affairs.

Posen said China is suffering from a “prolonged coronavirus economy” and that the Chinese government has taken “increasingly capricious and arbitrary actions in restricting economic activity” in the years leading up to the pandemic, especially during the pandemic. I took it,” he said.

He said this relief package, a large-scale effort to ensure that everyday Chinese people check state-sponsored intrusions into their wallets, has been slow to materialize, limiting the effectiveness of government efforts to stimulate the economy. He said that

Posen said this is a common problem in authoritarian regimes. They often deny the growth previously achieved by the private sector by “tightening the screws on government control in counterproductive ways.”