The Chinese economy, the second-largest in the world, is expected to grow at a rate of 5% this year, marking a downgrade from previous projections by the International Monetary Fund (IMF). Additionally, the IMF has revised its forecast for China’s economic growth in 2024 to 4.2%, reflecting a further downgrade from its earlier expectations, as stated in its July report.
Earlier in the year, hopes were high for a robust economic rebound in China as the communist government lifted strict “zero-COVID” lockdown measures that had severely hampered economic growth in 2022. However, the nation now faces challenges stemming from issues in its overbuilt housing market, contributing to the downward revision in growth projections.
The IMF has voiced concerns over the growing trend of countries forming geopolitical blocs, which could potentially limit international trade and hinder global economic growth. Notably, the United States and its allies have imposed unprecedented sanctions on Russia following its invasion of Ukraine. Simultaneously, efforts are being made to reduce dependence on Chinese imports, driven by escalating tensions with Beijing.
In its report, the IMF highlighted the substantial increase in new trade restrictions imposed by countries worldwide. In the previous year, nearly 3,000 new trade restrictions were introduced, a significant rise from the fewer than 1,000 restrictions recorded in 2019. This trend is seen as detrimental to international trade, with the IMF projecting modest growth of just 0.9% in 2023 and a slightly improved 3.5% in 2024. These figures fall significantly below the 2000-2019 annual average of 4.9% growth in international trade.
The evolving global economic landscape, marked by shifting economic power, trade disputes, and geopolitical tensions, continues to pose challenges to the outlook for economic growth and international cooperation. The IMF’s revised projections reflect the complex and interconnected nature of today’s global economy, emphasizing the importance of addressing geopolitical tensions and trade barriers to ensure sustained economic recovery and stability.
Gary P Hernal started college at UP Diliman and received his BA in Economics from San Sebastian College, Manila, and Masters in Information Systems Management from Keller Graduate School of Management of DeVry University in Oak Brook, IL. He has 25 years of copy editing and management experience at Thomson West, a subsidiary of Thomson Reuters.
