Explainer | China’s three-legged race to fend off the 4 Ds of an economic apocalypse
- The dangers of debt, deflation, de-risking and demographics are at China’s doorstep, threatening growth in its US$17.67 trillion economy
- A property crisis, chilled consumption, weak momentum and a broad lack of confidence in the economic outlook do not bode well for a return to normality in 2024
China’s 5.2 per cent rise in gross domestic product (GDP) last year, despite beating its annual target and still well outpacing growth in developed Western countries, has yet to convince the market that all is well in the world’s second-largest economy, according to observers.
And the race is on as policymakers grapple with the ramifications of four distressing “Ds” – debt, deflation, de-risking and demographics – that continue to bog down the 126-trillion-yuan (US$17.67 trillion) economy at the starting blocks of 2024.
The race of key industries against plunging property
China’s property-development investments slumped 9.6 per cent last year, with the total area under construction dropping by 1.5 per cent and total sales falling 6.5 per cent to 11.66 trillion yuan.
The added value of the real estate sector accounted for 5.8 per cent of the national GDP last year – a years-low, according to government data.
“China is seeing a dual-track recovery,” said Yu Xiangrong, Citigroup’s chief Greater China economist, at a webinar this month.
