Growth Breakdown in China – The Chinese Economy Is Already Paying Dearly for Xi Jinping's Chaotic Management of COVID.

While it was expecting China to grow by 8.1% in 2023, the World Bank has revised its forecast downwards to 4.3%... And the wave of COVID could make things worse.

2022 was supposed to be a special year for Xi Jinping who was going to be confirmed for a third term at the 20th National Congress of the CCP in mid-October 2022. But if 2022 will remain a special year for China, it is not for this reason, but rather for the complete collapse of the Chinese economy due to the deplorable management of the COVID-19 pandemic by Xi Jinping and the CCP.

Such chaotic management that the future of the Chinese economy, which was promising, is now tarnished. According to the latest JCER forecasts, China will not take the throne of the world's largest economy from America by the end of the decade. Even worse for Xi Jinping, China will probably still be far behind America in 2035.

A real failure for Xi Jinping.

Xi Jinping's country, which is facing a meteoric rise of the COVID epidemic and a gloomy global economic environment, is even seeing its annual growth targets, set at 5.5% for 2022, slipping away.

The World Bank just pushed the nail in the coffin, on Tuesday 20 December 2022, by revising its growth forecasts for the country downwards. It now expects GDP to rise by 2.7% in 2022 and 4.3% in 2023. In June 2022, the World Bank was still betting on +4.3% in 2022, then ... +8.1% in 2023. “China's growth prospects are subject to significant risks,” the institution said today. “The first of these concerns the uncertain trajectory of the COVID epidemic.”

It is true that the abrupt lifting of health restrictions, after the protests in late November 2022 where demonstrators called for the resignation of Xi Jinping, has led to a wave of contaminations unseen since the beginning of the pandemic. Beijing reported on Monday, December 19, 2022, two new deaths, an assessment completely disconnected from reality. But with the CCP, lies of this type are classic.

Testimonies show very high activity in crematoriums in China, as well as overflowing hospitals. And there is a shortage of anti-flu drugs in pharmacies.

Urgent review of the vaccination strategy

Experts point out that China is ill-prepared for the wave of infections linked to the exit from Xi Jinping's strict zero-COVID policy, while millions of elderly and vulnerable people remain unvaccinated. “The possibility of further mobility restrictions and precautionary behavior to slow the spread of the virus could lead to a longer-than-expected disruption in economic activity,” the World Bank notes.

The engine of the national economy, consumption, has already seized up, as evidenced by the collapse of imports in November 2022.

The World Bank is urging the Chinese authorities to act quickly to institute “a safer and less disruptive reopening.” In particular, it calls for increased vaccination rates for vulnerable people, but also “the rollout of a booster campaign, increased access to effective treatment, and better use of hospital capacity for severe cases.”

In addition to Covid, the World Bank is concerned about the ongoing crisis in real estate, a sector that, along with construction, accounts for more than a quarter of China's GDP. Many developers are struggling to survive, which is undermining an entire sector of the economy. These “persistent tensions” could have “more significant” macroeconomic and financial consequences in the coming months, the World Bank warns.

Fiscal room for manoeuvre

Not to mention the war in Ukraine, inflation, and slowing demand for manufactured goods amid fears of a global recession. “Continued macroeconomic policy support will be needed in the near term as the economy remains below potential and the global environment weakens,” the World Bank assures.

According to the World Bank, China has the fiscal space to act quickly to support its economy, while at the same time carrying out deeper structural reforms: “Directing these fiscal efforts toward social spending and green investments rather than traditional infrastructure would not only support demand in the short term but would contribute to more inclusive and sustainable growth in the medium term.”

It remains to be seen whether Xi Jinping will be willing to hear this message when his bad decisions are already taking a heavy toll on the Chinese people.

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