The World Bank has issued a new warning to the Chinese economy as the Chinese government braces for another financial blow in 2024.
The World Bank claimed that China’s annual growth rate is expected to decline from 5.2% to 4.5% next year.
Investor looking at screen showing stock market movements at a securities company in Beijing
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Many global economies suffered a financial blow as regulations affected labor markets.
But most of the jobs created during China’s recovery were in low-wage, low-skilled service jobs.
“The outlook is subject to significant downside risks,” the report said.
He added that if the downturn in the real estate sector persists, the impact will be even wider and the already strained finances of local governments will be further strained.
The World Bank expects the Chinese government to pursue broad structural reforms.
It also calls on the central government to take measures to reduce the burden of support on local governments.
But it’s not all doom and gloom for the Chinese economy.
Investment has been active in strategically important areas such as infrastructure and computer chips.
A recovery in consumer spending will provide a much-needed boost to the Chinese government’s fiscal position.