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China Economy

In this series, we present our latest analysis on China's economic outlook and its impact on global economy for 2025 and beyond.

China Economy: Entering a New Phase for Growth

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 geopolitical uncertainties including the prospect of Trump 2.0, that threaten to compound China’s longer-term productivity challenges. The question is: What’s next?

China Key Themes 2025: A policy-driven, half-full glass economy

China Key Themes 2025: A policy-driven, half-full glass economy

Deflationary risks are the biggest concern for Chinese economy in 2025.
China sectoral implications of Trump 2.0

China sectoral implications of Trump 2.0

The incoming Trump administration’s trade policies will have significant impacts on China’s sectoral outlook. There will be a small near-term boost to Chinese output prior to the introduction of tariffs owing to a frontloading of orders. However, the long-term impact will be overwhelmingly negative on Chinese industrial activity.
Rethinking China’s productivity prospects in the era of AI

Rethinking China’s productivity prospects in the era of AI

Adverse demographic trends imply that the only alternative for sustaining China’s longer-term growth momentum would be to sharply accelerate productivity growth. The timely emergence of generative AI could partially close this gap.

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. Against the backdrop of a potential renewed trade war with the US in 2025, our economists modelled different scenarios to quantify the impacts of a weaker China on global economy.

Global: Revisiting the global impact from a slowing China

Global: Revisiting the global impact from a slowing China

China’s economy looks to have entered a marked downturn. Cyclical trends in China are always tricky to assess given the ‘smoothing’ of official data, but one clear signal that the economy is struggling is the recent stimulus package announced by the authorities – policy moves can often be revealing about underlying trends in China.
Six lessons from the US-China trade war as the next phase looms

Six lessons from the US-China trade war as the next phase looms

We estimate that a 1ppt rise in US tariffs cuts imports from China by 2.5% in the long term.
Infographic: Measuring risk exposure to China-Taiwan tensions

Infographic: Measuring risk exposure to China-Taiwan tensions

We have developed a globally consistent framework showing cross-country GDP vulnerabilities to an escalation in China-Taiwan tensions, factoring in three key channels of risks: trade exposure to Taiwan and mainland China, wider economic and industry reliance on semiconductors for producing output and price ramifications of shortages and disrupted shipping.
Europe-China interdependence will evolve but remain

Europe-China interdependence will evolve but remain

We think the EU-China economic relationship will experience more friction in the future due to structural changes to China’s economy, EU fears about Chinese goods imports undercutting European industry, and national security concerns. However, the EU and China will continue to display high levels of interdependence, providing a strong incentive to avoid major disruptions.

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.

Can Indian manufacturing capitalise on US-China tensions?

Can Indian manufacturing capitalise on US-China tensions?

India has benefited from US trade rerouting away from China since 2018, albeit to a much lesser extent than some of its Asian peers. India’s export strengths largely lie in sectors of the ‘old economy’, where growth potential is limited and competition is fierce. We estimate that the US-China trade war so far has improved India’s export prospects only to a limited extent, dashing hopes that an escalation of the conflict could boost the lagging manufacturing sector.
India has an edge over Mexico, but is not the next China

India has an edge over Mexico, but is not the next China

Our tool suggests India is a strong contender. Holding India back is its low productivity per worker and poor education levels, but it still is the top-scoring emerging market.
China-India – Expanding the middle classes

China-India – Expanding the middle classes

Indian consumers’ spending power is far behind that of their Chinese counterparts, and we are sceptical about the pace of catch-up. Even if the Indian economy achieves the ambitious growth targets set, there are few signs that record levels of income inequality will reverse soon.
The miracle growth story of Vietnam has further to unfold

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.

More analysis on China →

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