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China’s economy downshifts to slower growth path as focus turns to social equality, national safety
- Beijing still wants to double China’s GDP by 2035, but ‘policymakers feel they need to address social issues to ensure social fairness and justice’
- Policy change prompts concerns that China is returning to a more nationalised economy that favours stability and protecting state enterprises
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This is the first part in a series of stories looking at China’s economic outlook in the second half of 2021 as it continues its recovery from a coronavirus-hit 2020.
As US-China relations continue to deteriorate, Beijing is making a major policy shift towards social and economic governance that looks to be setting up a long-term decline in the nation’s corporate productivity and economic growth, according to analysts.
For starters, a number of restrictive factors – including demographic constraints on consumption, climate constraints on manufacturing, and macro constraints on monetary and fiscal policy – suggest China is facing a downshift to a slower growth path, said Richard Yetsenga, chief economist at ANZ Bank.
And analysts agree that a sweeping regulatory clampdown on the nation’s education, tech and property sectors signals that Beijing has reset its priorities on social equality and national safety to tackle social inequality, data security risks and environmental sustainability, rather than focusing solely on bolstering economic growth.
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