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The growth challenge for China's new leadership team

The 20th National Party Congress will usher in a new team tasked with executing Xi Jinping's New Development Concept for the economy. They face a daunting task.

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In the run-up to next month's 20th National Party Congress, a pall hangs over China's economic outlook. The most recent projections by the International Monetary Fund put China's GDP growth for the year at 3.3 per cent, 1.5 percentage points below its initial forecast; some private-sector forecasts now have dipped below 3 per cent.

There are several reasons for China's slowing growth. These include the unwinding of the property sector boom, which has been a major driver of growth in the past two decades. A push by the central government in 2020 to rein in the real estate sector has backfired - major developers have foundered, would-be buyers have stayed away for fear of being stranded with unfinished property. Dwindling land sale revenues for local governments has hampered an economic stimulus. Meanwhile, property prices have been falling for more than a year now, and have started to undermine consumer confidence, which is at the lowest point since 1991.

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A version of this article appeared in the print edition of The Straits Times on September 24, 2022, with the headline The growth challenge for China's new leadership team. Subscribe