What Is Next for China’s Economy?

China’s post-COVID recovery has been hurt by Beijing’s crackdown on real estate and tech giants. Strong exports have saved the economy but what happens when global demand for Chinese goods decreases?

Despite projections of 8% economic growth this year, China is struggling to handle many economic challenges. The debt crisis of the country’s biggest property developers, including Evergrande, are threatening to crash the property market. New home sales are down by a 20%.

Beijing has also moved to rein in many of China’s technology giants, sparking shares selloff of online shopping Alibaba and video game maker Tencent, among others. On Friday, Tencent was ordered to suspend the rollout of new apps as part of further curbs on its expansion plans.

Last month, Chinese regulators took aim at the regional banking sector, amid concerns that business tycoons and local government officials have built up too close ties with some of the country’s small- and medium-sized lenders.
According to The Economist magazine, these banks make up about a third of China’s commercial banking sector, with $14 trillion in assets.