China’s economy grew 5.2% in 2023, slightly more than the official target, but the recovery was far shakier than many analysts and investors expected, with a deepening property crisis, mounting deflationary risks and tepid demand casting a pall over the outlook for this year.
Expectations that the world’s second-largest economy would stage a strong post-COVID bounce quickly fizzled as the year progressed, with weak consumer and business confidence, mounting local government debts and slowing global growth sharply weighing on jobs, activity and investment.
Kind of hard to grow an economy without new workers entering the work force to work those new jobs, and the future cohorts of high school graduates in china are looking smaller and smaller for the next couple of decades. Really the best option would streamlining production in low skill areas, substitute capital for labor, so those workers can then go in to high skill areas where they will be more over all productive. But that takes capital and the ability to take those workers out of the market for higher training, it also generally requires buy in and confidence from those workers that their higher skills will be rewarded which is not exactly a good bet right now.