China’s decline in growth is characterised by growing imbalances between the prioritisation of industry and investment on one hand and low consumption and the property crisis on the other. While this situation is reminiscent of 1990s Japan, which suffered a weak growth rate and low inflation, China’s economic slowdown could be less severe if its growth model is rebalanced.... Lire la suite
The energy transition is expected to involve use of mineral-intensive technologies, with high demand for certain so-called “critical” or “strategic” minerals such as lithium, copper and rare-earth elements. In the short term, the global supply of these minerals should be sufficient to meet shifts in demand, even though the value chain is heavily concentrated, particularly in China. The possibility... Lire la suite
Emerging economies, especially Asian countries and commodity exporters, are the most vulnerable to the structural slowdown in Chinese growth, due to their high degree of trade and financial dependence on China (loans, FDI). They are expected to be affected by falling Chinese demand and the resulting impact on commodity prices, as well as by gradual, ongoing cuts to Chinese financing.... Lire la suite
China’s public finances are organised in a complex and opaque manner, and are structured into various accounts with unclear scopes, along with off-balance sheet commitments. The important role of public investment in China's growth has resulted in high debt levels for local governments. In the wake of the COVID-19 pandemic, local finances are at risk, which has made far-reaching reforms all the mo... Lire la suite