Broken China?

Broken China?

May 1, 2024

This white paper examines China’s economic situation post-COVID-19, analysing if the recovery has stalled and the long-term implications for the world’s second-largest economy. It looks at key economic and structural weaknesses, including declining factory activity, falling consumer prices, a struggling property sector, rising unemployment, and demographic challenges.

China, the world’s fourth-largest country and second-most populous, shares borders with 14 other countries. Despite being a central player in the global supply chain, little is known about the Chinese people. This may be because China is an officially atheist state with over 40% of the population identifying as agnostic or atheist, and 91.6% identifying as ethnically Han.

China is different, or is it really?

Analysts at Cyjax have made multiple predictions on how the country will strategise over the cold months:

  • Economic: China faces the risk of a deflationary spiral, necessitating potential rate cuts and increased financial stimulus.
  • Real Estate: Persistent weakness in the property market threatens further economic challenges, potentially requiring policy adjustments and posing risks to commercial developers.
  • Election Influence: Tensions between China and the U.S. may heighten during the presidential election, with speculation about Chinese interference to exploit social divides.
  • Taiwan Relations: China’s pressure on Taiwan is expected to intensify, with increased military activities likely but a full-scale invasion improbable.
  • Dissent: Internal discontent may lead to pushback against the Chinese Communist Party, particularly from younger demographics, possibly manifesting in increased activism or negative rhetoric.