Outlook on China in 2024
Mercator Institute for China Studies (MERICS)
Getting China right.
China just reported that its economy grew 5.2 percent in 2023, in line with its official forecast. But with the International Monetary Fund forecasting that growth will slow to 4.6 percent in 2024 due to ongoing property-market woes and subdued export demand for Chinese-made goods, the year ahead looks anything but plain sailing for Xi Jinping.
In this first MERICS China Essentials of the new year, our experts analyze what 2024 might hold in store for China. MERICS Analyst 安复礼 expects another year of anti-corruption measures, a perpetual feature since the start of Xi’s tenure in 2013: “Without some separation of powers to allow checks and balances by independent watchdogs, a one-party state like China essentially supervises itself to prevent systemic corruption.” The results aren’t stellar. Read more
More of the same is also likely in China’s difficult relationship with Taiwan, after voters there installed the Democratic Progressive Party (DPP) for a third successive term in government. MERICS Analyst Claus Soong says Beijing is likely to take “military and economic actions in new attempts to coerce Taiwan”. But he says it will be careful not to cross any geopolitical red lines that would rouse the USA, not least because of a raft of domestic problems. Read more
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Nevertheless, MERICS Analyst Jacob Gunter predicts that Beijing will this year again refrain from stimulating economic growth – “discipline will likely continue in necessary but painful deleveraging” – and continue to place the geopolitical priorities of the party state above the economic needs of the country. Read more
Adding to China’s economic woes will be the USA’s ongoing restrictions on tech exports. As a result, “2024 looks set to be a decisive year for China’s technology pathway,” says MERICS Analyst Antonia Hmaidi : Beijing will have little alternative but to invest heavily in chips and other tech areas to replace foreign parts.?European companies should brace for the fall out. Read more
You can read the MERICS China Essentials on our website .