China’s economic growth is expected to slow further in 2025, dropping to 4.3%, down from the projected 4.8% in 2024, according to the World Bank. Although Beijing's recent stimulus measures have provided a temporary boost and slightly lifted the 2024 forecast (+0,3% по сравнению с апрелем), the long-term outlook remains uncertain, and the 2025 forecast remains unchanged.
The stimulus, which initially sparked investor optimism and a brief stock market rally, has raised questions about its sustainability. Aaditya Mattoo, the World Bank’s chief economist for East Asia and the Pacific, expressed doubt over whether the measures could alleviate deep-rooted concerns, such as declining wages, property market troubles, an aging population, and growing health and employment fears.
James Sullivan, head of Asia-Pacific equity research at JPMorgan, pointed out that the current stimulus is more focused on the supply side and investment rather than directly addressing consumer demand. This raises uncertainty about whether it will lead to a meaningful recovery in consumer spending.
The World Bank continues to recommend that China focus on long-term structural reforms, such as encouraging competition, upgrading infrastructure, and reforming its education system to maintain sustainable growth. While the short-term boost from stimulus measures is beneficial, particularly for China's neighbors, deeper reforms will be necessary to lift long-term growth prospects.
China’s slowdown could also have a significant impact on the rest of the East Asia and Pacific region, which remains highly dependent on China’s economic performance. However, the World Bank projects the region to grow at 4.9% next year, driven by an expected recovery in exports and improved financial conditions. Still, the World Bank warns that the region will need to identify new domestic growth drivers as China’s influence continues to wane.