Despite a 5.3% increase in the first quarter, China’s economy is still working towards a full post-pandemic recovery. The country is transitioning towards new sectors like electric cars while seeking to attract skeptical foreign investors. However, concerns about the complexity of the external environment and the need for a more stable economy remain.
In 2024, China is focused on avoiding various financial challenges such as a real estate market collapse, local government debt, and deflationary pressure. Despite a 1.6% increase compared to the last quarter, there are still shadows of uncertainty lingering due to risks in public finances. The Fitch agency downgraded China’s credit rating to negative last week due to these risks.
China’s focus on promoting new productive forces is aimed at reducing its reliance on traditional sectors like real estate. Consumption has grown in sectors like leisure and restaurants, but real estate sales continue to decline, indicating a slowdown in the market. Investment flows reflect Beijing’s intentions with an emphasis on high-tech industries and aerospace manufacturing.
Overall, while China’s economy is showing signs of recovery and growth, challenges remain in transitioning to new sectors and stabilizing public finances. The country continues to navigate uncertainties in the global economy and work towards achieving its annual economic objectives.