Fri, 17 Jan 2025

Three reasons Trump tariffs aren't China's only problem

China's economy has hit the government's 5% growth target for 2024 in the face of multiple challenges.

* China's economy grew at 5% in 2024, meeting its growth target
* This is one of the slowest rates of growth in decades due to a protracted property crisis and high local government debt
* The government launched stimulus measures to boost growth, but experts predict it may be hard for China to achieve higher growth rates in the future
* Business and consumer confidence are low, and the Chinese yuan will continue to weaken as Beijing cuts interest rates to boost growth
* The threat of President-elect Donald Trump's tariffs on $500bn worth of Chinese goods looms large, but experts say this is not the only challenge facing China's economy
* Exports may slow down due to rising tariffs, which could impact Chinese businesses and suppliers of energy and raw materials
* Household wealth in China is largely invested in the property market, which is struggling with oversupply and falling prices
* The government has implemented policies to stabilise the property market, but experts say this will take time and may not be enough to boost growth
* Low household consumption and high youth unemployment are also affecting China's economy
* Experts predict that China needs to address deeper issues in the economy, such as low private sector investment and innovation, to boost growth and confidence.
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