Publication: China Economic Update, June 2024: Growing Beyond Property: Cyclical Lifts and Structural Challenges
Loading...
Other Files
4,598 downloads
Published
2024-06-14
ISSN
Date
2024-06-14
Author(s)
Editor(s)
Abstract
Economic activity picked up in China in early 2024, buoyed by stronger exports. Meanwhile, growth in domestic demand moderated. Manufacturing and infrastructure investment and consumer spending on services remained robust, while the property market correction continued. In the long term, China’s rapidly aging population will have wide-ranging economic impacts, but with the right policies the demographic transition is manageable. The economic challenges from an aging population can be overcome with policies that increase labor force participation and extend productive working lives. Affordable childcare, better work-life balance, elimination of gender bias in hiring, a higher retirement age, skills upgrading, and lifelong learning are measures that could expand China’s workforce and make it more productive.
Link to Data Set
Citation
“World Bank. 2024. China Economic Update, June 2024: Growing Beyond Property: Cyclical Lifts and Structural Challenges. © World Bank. http://hdl.handle.net/10986/41709 License: CC BY-NC 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Related items
Showing items related by metadata.
Publication China Economic Update, June 2021(World Bank, Washington, DC, 2021-06)China’s recovery has broadened as economic activity has continued to normalize. Economic growth in China is projected to reach 8.5 percent this year before slowing to 5.4 percent in 2022, as low base effects dissipate and the economy returns to trend growth. As China’s recovery firms up, macroeconomic policies are expected to shift from accommodative to more neutral settings. The pace of policy normalization, however, should continue to be data-dependent and calibrated to the strength of the recovery in China and the rest of the world. Rising financial vulnerabilities, together with subdued productivity growth and persistent imbalances in the structure of aggregate demand, pose medium-term challenges that require attention. Macroeconomic policies and structural reforms should aim at reinvigorating the shift to more balanced high-quality growth.Publication Kenya Economic Update, June 2024(Washington, DC: World Bank, 2024-06-14)Tight monetary policies, restrictive financial conditions, and the slowdown of global trade continued to weaken global growth. Global economic growth declined in 2023 and is expected to decline further in 2024. Although the monetary tightening in advanced economies is expected to end and the global headline inflation has reduced, policy rates are expected to only decline gradually, as core inflation has been more persistent. Commodity prices declined in 2023 and are expected to decline further in 2024. At the regional level, growth in Sub-Saharan Africa is expected to rebound in 2024-2025 driven by a boost in private consumption from the reduction in inflation and increasing real incomes. However, tight monetary policies and fiscal consolidation efforts will keep investment and public consumption subdued in 2024 even as inflation declines. Fiscal balances are expected to improve in 2024 but external borrowing costs remain high.Publication Cambodia Economic Update, June 2024(Washington, DC: World Bank, 2024-06-14)Cambodia has made significant strides in expanding access to education over the past decade. The country’s net enrollment rates have increased steadily, with primary education attendance reaching 90 percent in 2019, up from 81 percent in 2009. Similarly, enrollments at the lower and upper secondary levels have shown good progress. Despite these improvements, Cambodia still faces numerous challenges in providing quality education to all its citizens. The recent COVID-19 pandemic has further exposed the vulnerabilities of the education system, with prolonged school closures leading to substantial learning losses. Even prior to the pandemic, Cambodia already faced high learning poverty rates, with students scoring low in both Khmer and mathematics. Moreover, disparities in access to education, especially at the secondary level, and variations in learning outcomes, persist across different geographic locations and socioeconomic backgrounds. This Special Focus chapter on education delves more deeply into these critical issues. By examining educational access, spending, outcomes, teacher effectiveness, and foundational learning, we seek to provide actionable policy recommendations to strengthen Cambodia’s education system. The chapter will address the following areas: access and equity in education, with a focus on early childhood education and primary schooling and an examination of trends in enrollment and learning outcomes and a discussion of strategies to enhance access and quality; trends in education spending and the relationship to learning outcomes and the need to focus on spending better; and the importance of teacher effectiveness and policies to improve teacher recruitment, training, and deployment. The final section summarizes the key findings and provides policy recommendations that prioritize spending better, improving teacher effectiveness, and strengthening foundational learning.Publication Cameroon Economic Update, June 2024(Washington, DC: World Bank, 2024-08-06)This 3rd edition of the Cameroon Economic Updates is part of a program of annual reports analyzing Cameron’s deve lopment trends and constraints. The report provides a comprehensive analysis of the country’s recent economic developments, medium-term economic outlook, and therole of fiscal instruments in sustainable forestry. It examines Cameroon’s economic performance within the context of global and regional economic conditions, highlighting the interplay between fiscal policies and forestry sector challenges.Publication China Economic Update, December 2024(Washington, DC: World Bank, 2025-01-16)China’s gross domestic product (GDP) growth has moderated since the second quarter of 2024, owing to subdued domestic demand. The government has responded to the domestic demand slowdown with incremental policy stimulus, balancing short-term growth support with longer term de-risking objectives. While monetary policy has been eased, its impact has been constrained by subdued credit demand. Despite lower down payment ratios and mortgage rates, state-financed purchase of housing inventories, and liquidity support to developers, the property sector remains weak in the face of dampened housing demand. The outlook is subject to domestic and external risks. Domestically, a more persistent downturn in the property sector could further temper investment and local government revenues. Tighter local government financing, in turn, can lead to under-execution of fiscal policies, dampening growth. China’s growth slowdown is partly driven by structural factors, such as structurally low consumption, high property developer and local government debt, and an aging population. Addressing these challenges requires structural reforms to address vulnerabilities and sustain growth. Key priorities include (i) fostering domestic demand by strengthening social safety nets, redirecting fiscal resources to social spending, and promoting market-oriented reforms to encourage private sector investment; (ii) supporting a sustainable property sector recovery by addressing shortcomings in the property financing mechanism and resolving the sector’s debt overhang; and (iii) managing local government financial risks through reform in the fiscal framework and medium-term subnational fiscal consolidation.
Users also downloaded
Showing related downloaded files
Publication Georgia Systematic Country Diagnostic Update(Washington, DC: World Bank, 2023-10-26)Since the release of the first Georgia Systematic Country Diagnostic (SCD) in 2018 Georgia has regained upper middle-income status and has shown resilience amid a rapidly changing external environment. Economic growth has remained robust despite shocks, driven by capital accumulation. Consistent with the slowdown in the labor contribution to growth, poverty reduction has slowed in recent years, as income from wages has decreased. Georgia has struggled to create quality jobs, and labor force participation has declined. Constraints to firm productivity and growth limit the ability of enterprises to create good jobs. Georgia has made significant strides in access to social services, but human capital formation is undermined by quality constraints, particularly in education. In terms of sustainability, Georgia has so far been unable to decouple carbon emissions from economic growth. The report discusses as well other aspects of resilience, in terms of response to shocks and overall governance. Going forward, this SCD update identifies ten policy objectives and four high level outcomes (HLOs). These HLOs are: (i) enhanced creation of good quality jobs by boosting productivity; (ii) improved and more equitable human capital; (iii) enhanced readiness to climate change and the green transition; and (iv) improved resilience to shocks.Publication From Recovery to Rebalancing(Washington, DC: World Bank, 2020-12)Following a collapse in the first quarter of 2020, economic activity in China has normalized faster than expected, aided by an effective pandemic-control strategy, strong policy support, and resilient exports. While swift, the recovery has been uneven, with domestic demand recovering more slowly than production and consumption more slowly than investment. Real GDP growth is projected to slow to 2 percent this year before accelerating to 7.9 percent in 2021, as consumer spending and business investment continue to catch up, along with improving corporate profits, labor market conditions, and incomes. The growth outlook is predicated on the assumption that well-targeted containment efforts supported by the gradual rollout of effective COVID-19 vaccines starting in early 2021 will continue to keep new infection rates low and prevent the resurgence of large-scale outbreaks. Economic rebalancing toward services, innovation and consumption driven growth has important spatial implications. This issue is at the heart of the exploratory analysis of the focus chapter in this report. While regional disparities in output, labor productivity, and income have narrowed since the mid-2000s, convergence was driven by a surge in investment in lagging regions. This has led to growing financial imbalances, mounting debt, and diminishing returns that constrained further investment-driven catch-up growth. Moreover, as China seeks to rebalance its economy from investment to a more innovation- and services-driven growth model, it will need to embrace the growth potential of its most developed and innovative metropolitan areas and city clusters, shifting the growth pole back to the coastal regions. Against this backdrop, policies to foster market integration and reduce spatial frictions in factor markets would enable a more efficient spatial allocation of labor and capital, harnessing the benefits of agglomeration and urbanization. Such a shift will inevitably create tensions with other policy objectives, notably the aim to reduce inequality. Therefore, it will need to be accompanied by fiscal policies to ensure a more equitable delivery of public services and investment in human capital to mitigate the very real consequences of resultant spatial disparities on people’s lives and opportunities.Publication World Development Report 2021(Washington, DC: World Bank, 2021-03-24)Today’s unprecedented growth of data and their ubiquity in our lives are signs that the data revolution is transforming the world. And yet much of the value of data remains untapped. Data collected for one purpose have the potential to generate economic and social value in applications far beyond those originally anticipated. But many barriers stand in the way, ranging from misaligned incentives and incompatible data systems to a fundamental lack of trust. World Development Report 2021: Data for Better Lives explores the tremendous potential of the changing data landscape to improve the lives of poor people, while also acknowledging its potential to open back doors that can harm individuals, businesses, and societies. To address this tension between the helpful and harmful potential of data, this Report calls for a new social contract that enables the use and reuse of data to create economic and social value, ensures equitable access to that value, and fosters trust that data will not be misused in harmful ways. This Report begins by assessing how better use and reuse of data can enhance the design of public policies, programs, and service delivery, as well as improve market efficiency and job creation through private sector growth. Because better data governance is key to realizing this value, the Report then looks at how infrastructure policy, data regulation, economic policies, and institutional capabilities enable the sharing of data for their economic and social benefits, while safeguarding against harmful outcomes. The Report concludes by pulling together the pieces and offering an aspirational vision of an integrated national data system that would deliver on the promise of producing high-quality data and making them accessible in a way that promotes their safe use and reuse. By examining these opportunities and challenges, the Report shows how data can benefit the lives of all people, but particularly poor people in low- and middle-income countries.Publication Bulgaria - Integrated State-Owned Enterprises Framework (iSOEF) Assessment(Washington, DC, 2021)Bulgaria's transition to a market economy involved massive privatizations over the past few decades, however the central government still retains a portfolio of State-Owned Enterprises (SOEs) which includes some of the largest companies in terms of assets and revenues and dominates strategic sectors such as energy and transport. This report applies the new World Bank integrated State-Owned Enterprises Framework (iSOEF) to assess the Bulgarian state-owned enterprise (SOE) sector and help to identify ways to strengthen its corporate governance and performance. The report provides one of the first comprehensive applications of the World Bank's new iSOEF in Eastern Europe. The report outlines the SOE landscape in Bulgaria and then assesses two key aspects: SOEs fiscal impact and their corporate governance and accountability mechanisms. Leveraging World Bank expertise, this multidimensional assessment looks at the interrelationships of the challenges and opportunities faced by Bulgarian SOEs to propose holistic and sequenced recommendations that aim to strengthen governance and performance. The primary audience of the iSOEF assessment is the government of the Republic of Bulgaria, in particular the Ministry of Finance, the Ministry of Economy and Industry, the Public Enterprises and Control Agency (PECA), and other relevant stakeholders.Publication China Economic Update, June 2025(Washington, DC: World Bank, 2025-07-08)China’s economy has maintained solid growth momentum in early 2025, supported in part by monetary, fiscal, and property sector policy easing. However, growth is projected to moderate from 5.0 percent in 2024 to 4.5 percent in 2025 and 4.0 percent in 2026, as global trade restrictions and uncertainty weigh on exports, manufacturing investment, and labor demand. Beyond short-term stimulus, China will need to rely more on household consumption as an engine of growth. A sustained improvement in household consumption will require greater reform ambition, including (i) redirecting fiscal resources towards healthcare and social protection to reduce precautionary savings, (ii) addressing local governments' financial constraints to help maintain public services and drive public consumption, (iii) pursuing a more progressive fiscal system to stimulate consumption as lower-income households have a higher propensity to spend, and (iv) tackling the property sector overhang to restore household wealth and confidence.