China Economic Update, December 2019 : Cyclical Risks and Structural Imperatives
China's economy is slowing, reflecting cyclical factors and longer-term structural trends. Notwithstanding the recent conclusion of the phase one agreement between China and the United States, short-term risks remain tilted to the downside am...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/215531576769442917/China-Economic-Update-December-2019-Cyclical-Risks-and-Structural-Imperatives http://hdl.handle.net/10986/33063 |
| Summary: | China's economy is slowing,
reflecting cyclical factors and longer-term structural
trends. Notwithstanding the recent conclusion of the phase
one agreement between China and the United States,
short-term risks remain tilted to the downside amid a
fragile global outlook and the lingering impact of trade
tensions, especially on confidence. Adverse demographics,
tepid productivity growth, and the legacies of excessive
borrowing and environmental pollution will continue to weigh
on growth over the medium term. If downside risks lead to a
sharp reduction in growth, the authorities have policy space
to act, but this needs to be done in a way that is
consistent with reducing financial and corporate sector
risks and achieving the desired rebalancing of the economy
toward consumption and private investment. The key
medium-term priorities are to deepen structural reforms to
strengthen productivity growth and private investment, while
accelerating rebalancing toward consumption, services, and
green growth. This would require addressing market
distortions and mainstreaming environmental sustainability
into China's medium-term development strategy.
Implementation of these priorities would boost China's
long-term growth prospects; it would also help move toward a
more comprehensive and lasting resolution of remaining
deep-seated disagreements on global trade and investment,
and public goods agenda. |
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