China’s economic growth is steady, but many challenges remain - China’s latest business and technology news - SupChina

China’s economic growth is steady, but many challenges remain – China’s latest business and technology news

Recent reports on China’s overall economy have included some encouraging trends…

  • CNBC reports that strong global demand led to higher-than-expected import and export numbers in June. Exports rose 11.3 percent, and imports rose 17.2 percent, compared with a year earlier.
  • Bloomberg reports that China’s credit system became more efficient in June due to well-implemented regulations on financial speculation. This led to overall credit lending expanding even as money supply stayed the same.

…but there are huge obstacles the government still needs to overcome:

  • Productivity growth in the Chinese economy has been stuck at zero for almost a decade, as a direct result of stalled market liberalization and a 2008 stimulus package aimed at inefficient state-owned enterprises, Dexter Roberts writes in Bloomberg Businessweek.
  • Financial risks from debt, wealth management products, and sectors like property markets continue to alarm top officials. President Xi is personally attending the closed-door National Financial Work Conference that started on July 14, which is likely to propose actions to address what many see as the currently inadequate structure to manage financial risks.
  • Furthermore, Bloomberg reports that officials increasingly admit that the environmental damage to air, water, and soil caused by rapid economic growth is “grave,” costly, and unsustainable. As the country works to address these issues, the economic impact of potential environmental policy reform has become a major “swing factor” in estimates for future growth numbers.

Lucas Niewenhuis

Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.