Xi Jinping will try to spark an economic recovery (Image: Getty)
‘s economy is in a state of crisis, experts have warned, as President prepares a
On Monday, the ruling Chinese Communist Party vowed to introduce new support for the economy including the “loosening” of monetary policy for the first time in 14 years.
Beijing is facing a number of problems. The country is still facing a crisis in its property market following the collapse of Chinese real estate developer Evergrande in 2021.
China is also grappling with huge debt and the longer-term threat of an aging population.
Sonja Laud, chief investment officer at Legal & General Investment Management (LGIM), says China is in a “balance sheet recession” which was caused by the property crisis.
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China is in the midst of a property crisis (Image: Getty)
She said: “It’s very clear that China is facing a very difficult domestic situation.
“We’ve talked at length about the balance sheet recession, the fact that you can’t really stimulate away the excess in real estate that has been built over decades, and as such, it is a lengthy process to get through this in order to really get to the bottom and a more stable footing for the economy.
“The consumer cannot overcompensate for the weakness that we are now seeing unfold – in particular in the real estate space – which has been for a long period of time, one of the largest contributors to Chinese growth.”
Chinese leaders have now promised to adopt a “more proactive” approach and offer “extraordinary” support to the economy.
They added that new policies will “stabilise housing and the stock market”.
China’s lockdowns were also blamed for the economic woes (Image: Getty)
The announcements came during the China Economic Work Conference (CEWC), an annual meeting held between some of the country’s most important business and political figures.
Earlier this month, Chinese economist Gao Shanwen went viral as he highlighted issues with the Chinese economy.
He said: “The younger a province’s population is, the slower its consumption growth has been.”
Shanwen also said that lockdowns had left the country “full of vibrant old people, lifeless young people and despairing middle-aged people.”
Unemployment currently stands at 17% among young people in China. triple the national average.
Experts expect China to drop in the hope of spurring more investment in the country.