China: fresh Year 2024 Economically (and Not Only...) – Forecasts and Forecasts

What awaits China in 2024?

* Oh, my God * China will not quit Maintaining GDP growth at around 5%. This is crucial for the improvement of the country and for the perceived social benefits ( moods). However, it is hard to anticipate dynamic economical growth. The government next year and the following years will be facing a hard choice: whether to increase debt, increase the budget deficit to keep average growth rates, or quit these measures and agree to make the country grow economically free.

* Oh, my God * Foreign trade may recover its earlier dynamics, but it will not accomplish the two-digit increases recorded 2 years ago and before. The situation of the major economies of the world, whose condition straight affects the state of the Chinese economy, is decisive here. Contrary to media and political stories, these economies are linked in many ways, in many ways. If the world's largest economies don't start recovering their energy, China's economy won't have fuel for its own acceleration.

* Oh, my God * Problems in the real property sector will stay unsolved. The crisis in this marketplace requires urgent action. Many developers stand on the brink of insolvency, and the sale of real property is half as low as in December 2020. This is simply a serious problem for the full economy. The process of repairing the real property sector takes time due to the fact that besides many problems have been accumulated here over decades. These are not only financial but alternatively structural problems. The authorities must introduce a fresh marketplace model in this sector in view of specified conflicting interests as:

• the request to supply young low-cost housing in large numbers on the 1 hand and
• on the another hand, securing funds invested by hundreds of millions of Chinese in housing and houses purchased at astronomical prices.

The stableness of the real property marketplace in China is crucial from an economical and social point of view, as properties account for about 30% of the country's GDP and almost 70% of household assets (the housing was the best capital investment and protection against its depreciation).

* Oh, yeah * Unsolved remains the problem of advanced debt (self)local governmentsh, which require greater financial control by central institutions but at the same time aid to address this problem. According to estimates of the global Monetary Fund, this debt reached a level of $12.6 trillion (about PLN 49.45 trillion), i.e. 76% of the production value in 2022. According to estimates of economists from Tsinghua University, the overall amount of this debt may be up to 50% higher. This is another challenge for Chinese decision makers in the fresh year.

* Oh, yeah * In 2024 we will witness Further systemic changes in the Chinese economy. They will reduce the dependence of the economy on infrastructure investments and the real property sector to increase consumption and production in high-tech areas.

We'll be watching at the same time Transformations in different sectors. It is likely that economical activities specified as vocational education, technological education and digital learning, bio-pharmaceuticals, production and distribution of consumer goods, renewable energy sources (from development, natural materials to finished products), electrical vehicles, care for seniors and children will experience fast development. These economical activities will be supported by targeted government investment.

* Oh, yeah * For China, 2024 will be a period Promoting sustainable and long-term growth, by strengthening weak areas, stimulating home request and creating a favourable environment for business and investment, with emphasis on technological innovation (e.g. artificial intelligence, improvement of 5G and 6G systems, net of Things, large data, cybersecurity or blockchain). China will effort to make imports even more independent of the latest technological solutions (including integrated circuits) from the West. They will stay leaders in the global marketplace for electrical cars, batteries, solar panels or wind turbines. They will search to increase the competitive advantage in these areas.

* Oh, my God * Foreign policy It will focus on strengthening China's position as a global player without which it is impossible to resolve any crisis or regional or global conflict. The Global South countries (near East, Africa, Latin America) and Southeast Asia will surely be a priority. China will not forget its relation with the US and the European Union. In the first case, there is no request to anticipate a fall in tension or return to normality, for example due to the upcoming presidential elections, military aid to Taiwan, US Navy patrols in the South China Sea, maintenance of firewall duties, escalation of trade restrictions, ban on exports of advanced technology to China, blocking investments of Chinese companies, etc. Without the withdrawal of the United States from these activities, there is no chance of improving relations with China.

The European Union, as may be expected, will effort to impose restrictions on China like the United States, but this will not importantly affect trade relations with China. The best example will be the example of the United States. Key sectors of the EU and US economy cannot function without cooperation with Chinese companies providing them with essential natural materials, components, semi-finished products, machinery and equipment.

* Oh, my God * Demography: an ageing population will progress, the birth rate of children will fall further. Actions in these areas do not deliver the expected results. Expenditure on improving the situation will so be increased (type 500+ schemes, taxation relief schemes, subsidising residence in nursery, kindergarten, subsidising the acquisition of housing, etc., etc.). However, this will further increase the burden on the state budget.

In summary:

In 2024, China's strategical nonsubjective will be to accomplish economical growth with a focus on technological and technological innovation, the nonsubjective of which will be speeding up the construction of a modern industrial system. This change in precedence over the erstwhile year, which focused on expanding home demand, underlines the greater importance of industrial policy.

The degree to which China will focus on growth, balancing another economical objectives, remains uncertain.

The outlook for China in 2024 is complex and depends on many factors, including:

• their ability to deal with interior and external challenges,
• maintaining social stability,
• the number and quality of technological innovation,
• shaping relations with another countries as well as
• the global economical situation.

In doing so, it is not appropriate to presume a spectacular “disconnection” of the planet from China, despite declarations from different sides. The economies of developed and developing countries are closely linked. They cannot be separated by political decision. Today, it's just impossible. Although we must besides take into account the fact that we are surviving in a time of increasingly little rational political decisions, which are not related to economical realities.

In the real world, China occupies an important, frequently crucial place in the supply chains, has many unwitting links resulting from the globalisation process, as well as global transformation of generation.

The improvement of China depends on the improvement of the world, the improvement of the planet depends on the improvement of China.

It's the effect of the planet and China for the last 40 years. This effect cannot be reversed within a year or two.

China will proceed to grow in 2024 with simultaneous transformational trends. Sustainable improvement will be powerfully highlighted. China will stay a key economical player on the planet map, as well as an investment base for abroad business and capital.

What will be the year 2024 for China? This question will stay open until the first days of January 2025. Then we'll be sure. For now, we stay optimistic, but remember the words of Oksana Pankieyeva, a well-informed optimist.

We will so inform you within the framework of our capabilities and want you and yourself that this year 2024 is simply good.

Author: 梁安基 Andrzej Z. Liang, 上海 Shanghai, 中国 China

Email: [email protected]

Editorial: Leszek B.

Email: [email protected]

© www.chiny24.com