Analysts predict that the Chinese economy will encounter more challenges in the future. They estimate the economic growth rate could drop to 2 percent by 2027.
Recent reports from foreign media confirm that the Chinese economy is in serious trouble. Even Chinese President Xi Jinping publicly acknowledged the difficulties, leaving little room for further elaboration.
The current statistics reflect such reality. For instance, the manufacturing Purchasing Managers’ Index (PMI) registered at 49.4 in July, down 0.1 from the previous month. This indicates that the economy has slowed down for three consecutive months. This is a clear sign of economic struggle.
The second quarter growth rate was also underwhelming, at 4.7%, significantly below the expectation of 5.1%. This performance raises doubts about this year’s growth target, which is around 5%. It would be a challenge for economic authorities to meet this goal. Consequently, they have been actively proposing different measures to stimulate the economy since the 3rd Plenary Session of the 20th CPC Central Committee held last month.
However, these measures seem to show minimal effects. The bigger concern is that such a phase will persist. Chinese economists, who typically maintain a relatively positive outlook on the domestic economy, are expressing concerns.
Similarly, the long-term outlook does not look favorable. The International Monetary Fund (IMF) has projected next year’s growth rate to be 4.5%, while some pessimistic forecasts suggest that it could be limited to the 2% range by 2027. Economic commentator Peng Mingmin candidly said, “We must acknowledge that the era of rapid growth in China is over. Moving forward, we need to operate the economy with lower growth as a given.”
China planned to surpass the United States by 2035 to become the world’s most powerful country. However, given the current circumstances, achieving this seems quite challenging. Xi claimed the so-called “Chinese Dream” may become a mere dream.
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