China's Economy: Current Trends and Issues (CRS Report for Congress)
| Release Date |
Revised Aug. 9, 2024 |
| Report Number |
IF11667 |
| Report Type |
In Focus |
| Authors |
Karen M. Sutter, Michael D. Sutherland |
| Source Agency |
Congressional Research Service |
| Older Revisions |
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Summary:
The International Monetary Fund (IMF) assesses that the
People’s Republic of China’s (PRC’s or China’s) real gross
domestic product (GDP) grew by 5.2% in 2023 and projects
5.0% real GDP growth in 2024. This growth is unbalanced,
with supply much higher than domestic demand. The World
Bank says that soft domestic demand, weak domestic and
foreign business confidence, “tepid” productivity growth,
and systemic debt, among other issues, could constrain PRC
future growth prospects. Some economists contend that the
economic returns of China’s growth model, which has
emphasized government investment and exports, is
diminishing. These elements still appear to feature in
China’s current economic policies, however.
The PRC government is seeking to reduce debt and boost
growth and productivity by investing in innovation,
education, digital infrastructure, advanced manufacturing,
and emerging technologies. It is also pursuing state-led
industrial policies to advance its economic and technology
development goals. Such statist approaches can distort
markets and incentivize production well above what China
can absorb domestically. As products supported by PRC
industrial policies come to market, China appears to be
looking to foreign markets for growth. China’s share of
global manufacturing output was about 30% as of 2022,
highlighting the potential influence of PRC production and
export policies on U.S. and global markets. Some in
Congress and the Biden Administration have expressed
concerns that PRC industrial policies and related subsidies
are fueling PRC export expansion in sectors such as electric
vehicles (EVs), semiconductors, solar energy, and steel.
