China’s economic growth decline in three decades
For the first time in three decades, China’s economic growth has fallen behind the rest of the Asia-Pacific region.
What are the figures?
According to the World Bank, the Asia-Pacific region’s annual growth outlook has dropped from 5% to 3.2%, mainly thanks to China’s economic struggles, as the superpower is responsible for 86% of the region’s economic output. In terms of GDP growth, China’s economy is now projected to expand by just 2.8% in 2022, while the rest of the Asia-Pacific region averages a GDP growth rate of 5.3%.
What’s the cause of this?
This marks the first time China has had a lower growth rate than its neighbors since 1990. Two factors have led to China’s economic slowdown. First, its Covid-zero policies aimed at eradicating Covid–19 have disrupted industry, domestic sales, and exports. Second, housing prices in 70 cities have fallen by 1.3% since this time last year, and almost one-third of all property loans are now classified as a bad debt by official figures.
According to the World Bank, the Asia Pacific economy was being driven by high commodity prices and a post-pandemic recovery in domestic consumption. China’s zero-Covid policy, however, had caused industry, domestic sales, and exports to be disrupted due to its tight adherence. The second-largest economy in the world was projected to increase by 4.5% in 2023.