The World Bank decreased its growth forecasts for China’s economy.
In its most recent China Economic Update, the international financial institution predicted that China’s economy will expand by 8% in 2021 before slowing to 5.1% in 2022. However, the World Bank previously said that the Chinese economy would expand by 8.1% in 2021 and 5.4% in 2022; the new forecasts would constitute China’s second-slowest growth rate since the Tiananmen Square massacre in 1989.
The World Bank explained:
Downside risks to China’s economic outlook have increased. Renewed domestic COVID-19 outbreaks, including the new Omicron variant, could lead to larger disruptions in economic activity. A severe and prolonged downturn in the highly leveraged property sector poses another downside risk which could have significant economy-wide impacts…
In the short term, ongoing efforts to address excessive leverage in the corporate sector should be maintained. The authorities should stand ready to provide policy easing, should domestic demand remain sluggish amid the lingering pandemic and the ongoing adjustment in the real estate sector, without abandoning their efforts to contain a further build-up of financial sector risks.
Over the medium term, China faces a difficult rebalancing act as it aims to transition to high-quality growth. The pandemic and subsequent recovery have worsened domestic and external economic imbalances. Furthermore, the traditional playbook of boosting growth through infrastructure and real estate investment has run its course.
The World Bank suggests “shifting the attention to remaining barriers to market competition” and “strengthening corporate and bank resolution frameworks” to spur new economic growth.
As The Daily Wire has previously reported, American businesses routinely seek to benefit from China’s large and rapidly growing consumer economy — even if it means acquiescing to the Chinese Communist Party’s narratives.
Last month, JPMorgan Chase CEO Jamie Dimon apologized for making a joke about the regime. After saying that his company will outlast the Chinese Communist Party — both of which are experiencing their centennial anniversary — Dimon apologized, explaining that it is “never right to joke about or denigrate any group of people, whether it’s a country, its leadership, or any part of a society and culture.” A spokesman for the Chinese government thanked Dimon and said that he had the “right attitude” in issuing the apology.
A report released earlier this month explained that Apple CEO Tim Cook secretly approved a $275 billion agreement with the Chinese government in 2016 — in which he promised that Apple would aid China’s technology industry with investments and worker training. The company’s iPhone is now the best selling smartphone in China.
More recently, the National Football League — which is seeking to expand internationally — released a map depicting Taiwan as part of China. Sen. Ted Cruz (R-TX) called the move “disgraceful cowardice” and blasted the NFL for “chasing dollars from the Chinese Communist Party.”
Earlier this week, Harvard University chemistry and engineering professor Charles Lieber was found guilty of lying about his ties to the Chinese government. Lieber participated in a Chinese-run program that lures American scientists to advance the communist nation’s scientific development.