The World Bank has recently updated its projections for China’s economic growth in 2024 and 2025, predicting a slight improvement. However, it also warned that a lack of confidence among households and businesses, along with ongoing problems in the property market, will create hurdles for the economy next year.
As the second-largest economy globally, China has encountered several challenges this year. These issues are primarily linked to the property sector and weak domestic demand. Additionally, the expected rise in U.S. tariffs on Chinese products could further slow growth. Mara Warwick, the World Bank’s country director for China, stated that for a robust recovery, it is crucial to tackle property market problems, strengthen social safety nets, and enhance the financial situation of local governments.
Warwick also pointed out the importance of striking a balance between immediate growth support and the need for long-term reforms. The World Bank now predicts a GDP growth of 4.9% for China this year, which is an increase from its earlier forecast of 4.8%. The Chinese government is targeting a growth rate of around 5% and remains optimistic about reaching this goal for 2025, even though growth is expected to slow to 4.5% in the near future. To stimulate the economy, Chinese authorities plan to issue a historic 3 trillion yuan in special treasury bonds next year, with further details expected to be revealed at the National People’s Congress in March 2025.
