China’s Uneven Economic Recovery Amid Global Pandemic and geopolitical Tensions: Bright Spots and Challenges

China’s slowing economy pressures Xi Jinping to step back on the global stage

Amid the global pandemic, China’s growth has slowed and recovery has not fully materialized, leaving consumers and businesses with low confidence. Before the Communist Party stopped publishing figures, over a fifth of young Chinese people were unemployed. However, there are still bright spots in China’s future, such as the growth of renewables – Chinese EVs are expected to capture a quarter of European sales this year. Despite March data showing a recovery in factory activity and Citi analysts upgrading their prediction for the economy to 5% growth this year, concerns persist about the slowdown in China and the possibility of never escaping the middle-income trap.

Recent events have brought hope that China may indeed be turning towards caution to ease external pressure on its economy. President Xi’s visit to meet President Biden in San Francisco and their subsequent two-hour phone call have been interpreted as China’s move towards caution. This is evident in Xi’s complaints about America’s sanctions hindering China’s progress in key technological areas such as semiconductors, AI, and renewables, as well as his objections to US support for Taiwan and TikTok.

As a result of these developments, there have been signs of a shift in China’s stance, with a decrease in aggressive rhetoric from Chinese officials and the removal of punitive trade barriers like the embargo on Australian wine. There has also been renewed dialogue between the Chinese and American militaries. These developments could indicate a move towards a more conciliatory approach by China to address its economic challenges and global pressures.

Leave a Reply