China’s economy is entering 2022 on a weak footing: GDP growth in the last quarter slowed to 4% and is unlikely to pick up any time soon, as more COVID outbreaks seem inevitable as the Chinese New Year and the Olympics approach. The resulting lockdowns will weigh down consumption and potentially disrupt supply chains. On top of that, financial troubles in the real estate sector are still unfolding.
However, China’s lower GDP growth rate and general downward pressure need to be seen in light of the government’s reluctance to unleash massive stimulus measures. Instead, Beijing seems increasingly willing to pay an economic price to achieve other policy goals, such as reining in internet platform giants, advancing industrial decarbonization and managing financial risks.
The intersection of slowing growth and these diverse policy goals will likely demand some adjustment in 2022. Whether China holds its current course or alters its priorities as resources are stretched thin, significant impacts will ripple out to foreign companies in the market, Beijing’s reform agenda, the self-reliance campaign, industrial and innovation policies, and a variety of other areas. All of these issues will likely be even more pronounced throughout the year in the highly sensitive run up to the 20th Party Congress, making it all the more important to get to grips with ongoing trends and possible scenarios and their implications.
MERICS members joined us for an analysis and discussion of China’s key economic indicators with MERICS experts:
Katja Drinhausen, Head of Politics & Society Program at MERICS
Jacob Gunter, Senior Analyst at MERICS
Max J. Zenglein, Chief Economist at MERICS
Bernhard Bartsch, Director External Relations at MERICS
This event was by personal invitation only.