Understanding the Chinese Economic Crisis

Mansoo Ji

Senior Research Fellow at  Korea Institute of Finance

jmansoo@kif.re.kr​​

Despite the expectation of its economic crisis, China grew 5.2% in 2023. Neither the downward of the real estate market nor local government debt problems are turning into systemic risks. Rather, it is the prolonged downturn in asset markets such as real estate and equities that is weakening the consumption and investment sentiment. Furthermore, a slowdown of China's long-term growth is inevitable due to the long-term growth-dampening factors of population, real estate, and debt. This has important geopolitical implications for the end of "China's rise and catch-up to the U.S. level". After 2030, the world will be a trilateral world with the US, EU, and China, each of equal size and growing at similar rates.​