China's economy is not out of the woods yet
China weathered the economic fallout from Covid-19 better than any other major country, and economists are predicting a bigger snapback
this year.To get more
China economy news, you can visit shine news official website.
But analysts say the world's second-largest economy also needs to address an array of challenges to get onto a more-sustainable growth
trajectory and help the world fully rebound.
China's job market remains fragile. Consumer spending hasn't kept pace with the broader recovery in economic output. Debt levels, already a
problem before the pandemic, grew at their fastest pace in more than a
decade during the first nine months of 2020, while asset bubbles in
stocks and real estate kept growing. China's central bank faces a tricky
balance between reining in stimulus without causing growth to sputter.
And now, a resurgence of Covid-19 infections in some parts of China, combined with a slow rollout of vaccines, is raising fresh worries about
the outlook. At a minimum, Beijing's plan to limit travel during the
coming Lunar New Year, which falls on Feb. 12, will likely hit consumer
spending, economists say.
All this matters because China is becoming a bigger part of the global economy, and a more important driver of growth world-wide. If its
performance in 2021 disappoints, it could hurt everyone, from car
brands to gadget makers to soybean farmers who are counting on Chinese
demand.
Economists generally are sticking with their forecasts that China's economy will grow around 8% this year after expanding 2.3% in 2020. But
many see risks, especially if Covid-19 proves hard to contain or
consumer confidence doesn't improve.
A key factor to watch, economists say, is the job market, and its effect on spending. While China's urban unemployment rate recovered
quickly last year after hitting an all-time high last February, many
economists believe the current rate of 5.2% understates the damage
Covid-19 did.
Many urban workers are still clocking fewer hours and earning less than before, despite holding on to their jobs. Others, including college
graduates and those who lost jobs due to Covid-19, are struggling to
find opportunities with good pay. Income growth remains weaker than
before the pandemic.
