Publications

Through the second half of 2023, the gap between China’s impressive official data and visibly underwhelming consumer demand, unresolved local government debt problems and an unprecedented drop in foreign direct investment was stark.

The economic effects of the pandemic obscured the underlying problems, but developments in 2022 underlined the structural nature of China’s slowdown. In its current trajectory, China’s economic growth will continue to grind ever slower.

During the second quarter of 2023 slow growth has caused the rhetoric around Chinese economic reform to turn more practical, but concrete actions have been insufficient. Without those structural reforms, systemic challenges have grown.

In Q1 2023 China reopened its borders and rolled out the rhetorical welcome mat for foreign investors. However, a public campaign to allay concerns about the direction of China’s economy has not been underpinned by a convincing shift in policy.

Over the year, teams from the Atlantic Council GeoEconomics Center and Rhodium Group have taken a data-driven dive into China’s economy to address a fundamental question: Is the Chinese economic system becoming more or less like other open-market economies? 

In Q2 2022 China’s economic growth slowed to 0.4% YoY, despite aggressive steps to support companies, boost consumption, and address youth unemployment. These measures amounted to short-term firefighting and do not address structural issues slowing Chinese growth.