Allianz – China, 2024

The report by Allianz – China, 2024 highlights the current challenges facing China's economy, including a struggling real estate sector and declining foreign investment. Despite these difficulties, China's exports remain strong, particularly in critical sectors such as electric vehicles, batteries, and solar energy products. These industries are expected to become the main drivers of growth in the future. Chinese EV makers have gained significant market share globally due to their value for price advantage. Additionally, China is dominant in the battery and solar module manufacturing sectors. However, there are potential risks to China's growth, such as the chips war, protectionism, geopolitical tensions, and excess capacity. Overall, China's economy is expected to experience lower trend growth, with a forecasted average growth rate of 3.9% over 2025-2029. However, the Japanese-style economic stagnation known as "Japanification" is not expected to occur in China due to factors such as the growth of the middle class and progress in urbanization. Chinese policymakers are urged to restore consumer confidence, implement consumer-focused policies, and encourage spending of precautionary savings.