Is China’s economy in serious trouble? (2024)

FAQs

Is China’s economy in serious trouble? ›

China's economy is showing multiple signs of weakness. Actual growth seems below the official figures; there is substantial deflation; the housing market has yet to stabilize; and the domestic stock markets have fallen significantly.

China is in the midst of a profound economic crisis. Growth rates are flagging as an unsustainable mountain of debt piles up; China's debt-to-GDP ratio reached a record 288% in 2023.

A prolonged Red Sea shipping crisis would pile pressure on Chinese exporters and challenge the Chinese economy that is already battered by a looming property sector crisis, weak consumer demand, a shrinking population, and sluggish global growth.

The counterintelligence and economic espionage efforts emanating from the government of China and the Chinese Communist Party are a grave threat to the economic well-being and democratic values of the United States. Confronting this threat is the FBI's top counterintelligence priority.

U.S. annual GDP currently stands at approximately $28 trillion, compared with China's roughly $18.5 trillion, according to International Monetary Fund figures.

China's economy is at a turning point. An old economic model underpinned by heavy investment in infrastructure and real estate is crumbling. Growth is slowing and prices are falling, raising the specter of a Japan-style slide into stagnation.

China's economy is showing multiple signs of weakness. Actual growth seems below the official figures; there is substantial deflation; the housing market has yet to stabilize; and the domestic stock markets have fallen significantly.

Some analysts even argue that China's economy may never surpass that of the United States. When considering further the vast soft power and geopolitical advantages the United States holds over China, it appears unlikely that China will displace the United States as a leading global power in the foreseeable future.

China has little overseas debt, and a high national savings rate. In addition, most of the debt is state owned – state-controlled banks loaned funds to state-controlled firms – giving the government the ability to manage the situation.

China's population has declined for a second consecutive year, underscoring concerns about the future growth of the world's second-largest economy. Data released on Wednesday showed a population of 1.409 billion at the end of 2023 - a 2.08m decrease from 2022.

Who is the biggest threat to the US? ›

Today, both Democrats and Republicans identify China as the greatest threat facing the country, but there are nonetheless significant partisan and ideological differences on this question.

They have significant economic ties and are significantly intertwined, yet they also have a global hegemonic great power rivalry. As of 2023, China and the United States are the world's second-largest and largest economies by nominal GDP, as well as the largest and second-largest economies by GDP (PPP) respectively.

According to the 2023 Global Wealth Report by Credit Suisse, Switzerland once again came out on top when it comes to the mean average wealth per adult at a whopping $685,230.

1- United States: Located in North America, the United States is the world's third largest and most populous country. It has once again surpassed China to become the world's richest country.

In the wake of China's economically disastrous zero-COVID policy, there is now the clearest of evidence that the Chinese housing and credit bubble has burst. Over the last year, housing prices have fallen in most major Chinese cities and housing demand has slumped.

That estimate might be a bit much, but 1.4 billion people probably can't fill them,” He told the Dongguan audience. Previous estimates have ranged from 65 million to 80 million vacant housing units in China. He's remarks suggest even these numbers are an underestimate.

But the downturn, already the longest on record, is not only dragging on — it is accelerating. In 2023, China's housing sales fell 6.5 percent. In December alone, sales were down 17.1 percent from a year earlier, according to Dongxing Securities, a Chinese investment bank. Investment for new projects also slowed.

China is targeting “around 5%” growth in 2024 and vowed to “transform" its growth model in the face of several significant challenges. (China claims its economy grew 5.2% in 2023, which some experts doubt.) In addition, China set its consumer inflation target to 3% and unemployment target at 5.5%.