China: can the car get back on the road?

Rebuilding China’s Economic Engine: From Fixing the Chassis to Recharging the Battery

China’s economic landscape in 2024 has been marked by significant challenges, ranging from declining consumer sentiment to a deepening real estate crisis. While stimulus measures have been introduced, they have yet to yield the desired results, prompting the government to prioritize deeper structural reforms.

This report explores how China is systematically addressing these issues, focusing on local government debt, the transition from a real estate-driven economy to emerging sectors like electric vehicles (EVs) and advanced machinery, and efforts to restore consumer confidence.

With recovery expected to take time, recent signs of improvement, such as increased transaction volumes during the Golden Week holiday, offer hope.

Read on to uncover the critical steps China is taking to steer its economy back on track and what this means for its future growth trajectory.