China Economy: Entering a New Phase for Growth

In this series, we present our latest analysis on China's economic outlook and its impact on global economy for 2024 and beyond.

China flag

China economy: Finding a cyclical floor amid a structural downturn

Almost all China observers agree that the economy is on a structural growth downtrend, citing ageing demographics, diminishing returns to capital, and rising risks of geopolitical tensions that threaten to compound China’s longer-term productivity challenges. The question is: How much of the current slowdown is structural?

dragon year

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China Key themes 2024 – A slower, but healthier, dragon year

China heads into 2024 with relatively loose policy settings, but private sector sentiment constrained by property pessimism. Policy efforts will reduce left tail risks but we don't expect it will be sufficient to prevent the growth downtrend persisting. Recognizing an upside risk that authorities could instead stimulate their way to a high growth target in 2024.

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Why we lowered our China medium-term growth forecasts

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Why we lowered our China medium-term growth forecasts

The combined large shocks from years of regulatory uncertainty, the prolonged zero-Covid policy, and a housing correction have undermined China’s supply-side potential more than we previously anticipated. We have therefore cut our estimates of China's future potential GDP growth rates.

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China city urban

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Is China headed for a Japanese-style balance sheet recession?

China's weak economic activity amid a housing correction has led many investors to draw comparisons with Japan's balance sheet recession of the 1990s. Despite the different pathways, there are several similarities between China now and Japan then that may augur a similar future of a period of prolonged stagnation.

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Spillovers from a weaker China on global economy

China’s role in the world economy is substantial. It accounts for around 10% of world trade and stock market capitalisation, around 18% of GDP (at market exchange rates), around 16% of world oil demand, and over a quarter of world broad money. Our economists modelled different scenarios to quantify the impacts of a weaker China on global economy.

us china gdp

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Chinese catch-up prospects recede as the US outperforms

The US has come out of the pandemic in better shape than China with GDP above pre-pandemic forecasts, whereas China has struggled in the face of structural issues like the property slump. Slower growth means China's economy is now unlikely to match the size of the US economy until the mid-2030s and living standards will remain well below those in the US.

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Global Scenarios Service: Taiwan Tensions

Global economic prospects remain relatively subdued. The peak impact of past policy tightening has yet to be fully felt in the advanced economies and China is expected to underperform relative to consensus.

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Spillovers from a weaker China likely to be modest

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Spillovers from a weaker China likely to be modest

China's weak economy and the mounting problems of the real estate sector have focused attention once again on the potential global fallout from its sharply slower growth. To understand the consequences for the global and regional economies, we conducted a comprehensive simulation exercise using the Oxford Global Model.

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The next China?

In response to China’s economic slowdown and rising geopolitical tensions, some businesses are pursuing “China plus one” strategies to reduce supply chains risks. Some are actively searching for “the next China”. We examined some of the most promising candidates and evaluated their potential.

Populated street in india

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China-India: population size matters, but it’s not all

India appears the economy most like China as it is the only one that can match it in terms of population size. But that's where many of the similarities end – in most other population characteristics the two countries are very different.

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The miracle growth story has further to unfold

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The miracle growth story of Vietnam has further to unfold

Vietnam's GDP grew by an average rate of 7% annually in the past three decades, surpassing all its ASEAN regional peers. Although 2023 and 2024 are set to see Vietnam's weakest growth outside of Covid years, we think the pain is short-term.

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Nearshoring – China’s loss is not (yet) Mexico’s gain

Mexico is the best-positioned emerging market to gain from "nearshoring." but that does not mean it has seen the greatest benefits. Asian economies and Canada have grown their share of US imports faster than Mexico since the US-China trade decoupling started five years ago.

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