China's Faltering Economy Drags on Global Growth, Risk of 'Middle Income Trap' Looms
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China's economy stalled in 2022 and is now dragging on global growth. 2023 growth expected around 5%, below 6%+ pre-pandemic average.
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2024 increasingly looks worse as real estate crisis continues and population decline kicks in. Growth to drop below 4.5% and then stagnate.
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Structural economic issues built up over years due to excess lending and government policies like zero-Covid. These issues now coming home to roost.
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Consumer and business confidence very low. Foreign investment turned negative in 2022 for first time in over 20 years.
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Without major reforms, China risks getting stuck in "middle income trap." Comparisons made to Japan's "lost decades." Demographic decline in 2040s will make growth impossible.