Pboc Expects Moderate Economic Growth

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Pboc Expects Moderate Economic Growth

PBOC Expects 5% Economic Growth

According to PBOC policy committee members, the economic growth of China will be 5% or a little higher in the year 2023. Although economic growth of this magnitude is considered good around the world, the same can't be said if we look at Chinese history.

In the last few years, China has successfully managed to achieve very high economic growth, which was unheard of around the world. But now, the Chinese economy is facing multiple headwinds, which is the reason why only 5% growth is expected this year.

No Chance Of Japanification

According to Wang Yiming (Monetary Policy Committee member), the current situation in China is different than what we see in Japan during the 1990s. So, on that front, the risk of japanification happening in the Chinese economy is very low.

However, experts are not as optimistic about the Chinese economy as the PBOC officials. According to them, there are many risks faced by China, such as high debt, property downturn, and an aging population. Basically, all the headwinds faced by the Japanese economy are also present in the case of China.

So, some experts say that the stagnation faced by Japan during the 1990s might also happen in China. However, the PBOC officials believe that the growth rate of China is medium to high, which is enough to dismiss any rumors of Japanification.

However, even if the growth rate of China remains near 5% during 2023, it will still not be good enough compared to the past. In fact, it will signal a gradual slowdown in the Chinese economy and will confirm the thesis that China is following in the footsteps of Japan.

Looking ahead, the rest of 2023 doesn't have anything to support the Chinese economy as well. For starters, the property downturn and the high debt problem alone are enough to weigh heavily on the Chinese economy. For the year 2024, all of these factors are also likely to remain consistent!

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