China’s economy is slowing. For the first time in decades, economic growth in China is slower than the Asia-Pacific region as a whole. And as the country emerges from a post-COVID Zero economy it may need to make changes to its economic playbook to get back on track.
When China was an export-led economy, government stimulus and efforts to boost exports were able to drive growth. But as China has got wealthier and shifted to a consumption-led economy, this playbook has got less effective.
With youth unemployment getting towards crisis, a slow-moving collapse in the property market and public pessimism about the economy, domestic consumption is well below trend. Turning that around will require policy makers to reject the solutions of the past and write a new economic playbook.
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