China's Uneasy Growth: A Treadmill of Structural Challenges

China's economy hit its 5% growth target, yet structural issues remain, as industrial strength fails to convert into improved living standards. Concerns grow over deepening challenges in 2025, with domestic demand weak and new US tariffs imminent, prompting fears of exacerbated economic imbalances and a vulnerable trade position.


Devdiscourse News Desk | Updated: 17-01-2025 12:21 IST | Created: 17-01-2025 12:21 IST
China's Uneasy Growth: A Treadmill of Structural Challenges
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China's economy achieved the government's 5% growth ambition, but the lopsided growth exposed significant structural problems, with many citizens experiencing declining living standards. Beijing aims to repeat this performance in 2025, despite fears of deepening challenges as US tariff hikes loom, potentially impacting China's already vulnerable trade position.

The uneven growth reflected in the December data, with industrial outputs surpassing retail sales and unemployment rising, highlight supply-side strength alongside domestic weakness. Export-led growth, supported by deflation, keeps Chinese goods competitive but widens trade gaps, while falling prices cut into corporate profits and consumer incomes.

As Beijing prioritizes domestic consumption, doubts over official data accuracy persist. Analysts warn excessive stimulus focused on industrial upgrades may worsen overcapacity, weaken consumption, and intensify deflationary pressures. Globally, China's position remains challenging amid trade tensions, with skepticism over growth targets and official data accuracy heightened.

(With inputs from agencies.)

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