China’s economy has been struggling for some time. I’m no economist, but I do pick up a thing or two. Economic growth itself (in terms of GDP) is not that bad, ending up at around 5 percent in 2024, roughly as expected. Last quarter, GDP showed quite a spike thanks to the incentives provided by the government since September 2024.
Admittedly, the fourth quarter presents a somewhat skewed picture: terrified of the impending high import duties in the US, the exporting industry pushed forward as many shipments as possible at the end of last year, to avoid any potential levies.
However, the main problem is not overall growth but domestic consumption and consumer confidence. Customers have been keeping a tight hold on their purse strings for some time now, have been spending much less. People are wary; particularly the problems in real estate have made consumers very paranoid. Once the government has fixed the housing market, the rest will be easy.
