While the size of China’s middle class has expanded significantly since the 2010s, reaching 32 per cent of the population in 2021, World Bank estimates suggest that nearly 55 per cent of the population remains economically insecure, underscoring the need to address disparities in opportunity.
The World Bank has called for enhancing economic mobility in China as it can help bridge rural-urban divides, reduce income inequality and unlock more consumption—a key pillar for rebalancing the economy toward more sustainable, domestic demand-driven growth.
Structural constraints include low consumption, high debt levels among property developers and local governments, and an ageing population.
Despite multiple challenges, China’s economic growth has remained robust at 4.8 per cent in the first three quarters of the year. But growth has moderated since the second quarter of 2024, weighed down by subdued domestic demand and a prolonged downturn in the property sector, the Update noted.
The government has provided policy stimulus aimed at balancing short-term support for domestic demand with longer-term financial stability objectives. To complement these stimulus measures, the Update, titled ‘Reviving Demand, Regaining Momentum’, suggested structural reforms to revitalise growth.
China’s growth is estimated at 4.9 per cent in 2024 and projected at 4.5 per cent in 2025, the Update said.
While recent policy easing measures are expected to provide moderate support, subdued household and business confidence, along with headwinds in the property sector will continue weighing on growth in 2025, it noted.
Structural constraints to growth include low consumption, high debt levels among property developers and local governments, and an ageing population.
Fibre2Fashion News Desk (DS)
