China has achieved remarkable economic growth since the beginning of the 21st century, positioning itself as a potential superpower alongside the United States. However, the global slowdown in the post-pandemic era has also impacted China. Recent reports show that China is faces challenges on multiple fronts, including in its services and manufacturing sectors, in late 2023.
Key economic indicators that have come out of China since the late summer season have caused concern among onlookers. In August, China’s services activity fell to its lowest level in nearly a year. This was exacerbated by demand that has also stagnated. This offset improvement that was seen in the manufacturing space.
Over the past two years, China has seen the largest drop in the country’s share of global GDP since the Mao Zedong era. The world economy is expected to deliver growth of $8 trillion in 2023. As it stands today, China will not account for any of that global gain. That is an unprecedented shift after the last few decades of incredible economic growth.
Fortunately, there were some positive signs for China in the month of October. Data showed that China’s consumption and industrial production markedly improved in October 2023. China delivered retail sales growth of 7.6% compared to October 2022. At that time, China was still being hindered by COVID-19 lockdowns. Some of these positive developments spurred the International Monetary Fund to boost China’s growth forecast.