The economy will stabilize and improve this year, and prudent monetary policy can bring reductions in the bank reserve ratio and interest rates. In the short term, the priority should be the expansion of domestic demand. In the longer term, innovation must drive high-quality development.

China is at a critical juncture. Its deflation-prone debt-intensive economy is seriously underperforming. Its government has become embroiled in a major superpower conflict with the United States. And it is staring down the barrel of a demographic crisis. Worst of all, Chinese authorities are responding to these challenges more with ideology and stale tactics from the past, rather than with breakthrough reforms. Imaginative solutions to tough problems are in scarce supply.

In 2024, China and the United States should seek an approach that is at once global and bilateral and addresses problems at the governmental working level and at the business level. With joint efforts, bilateral trade will start to grow again.

Charlene Barshefsky, a former top U.S. official, discusses in the interview with China-US Focus the lengthy negotiation process for China's entry into the WTO and its lasting impacts on China's economy, global integration, and U.S.-China relations, despite current challenges in trade norms and geopolitical shifts. She also emphasizes the significance of international businesses having a presence in China and the considerations they need to evaluate when determining whether to expand to the Chinese market.

Western hedge funds, banks and short sellers are targeting China, Hong Kong, and South Korea. As geopolitics is proliferating in Asia, weaponization is spreading to markets.

India wants to reduce China’s footprint in its industrial chains. China must deal with this by strengthening its own industrial and innovation chains. It must also improve its policy on industrial chain transfers. It should avoid contributing to India’s development at the cost of its own.

China’s slowing economy has fueled a broad range of takes on why Asia’s dominant power is losing its growth trajectory. Whatever the real reason is, China’s regulatory crackdowns seem to be digging a deeper hole to fall into.

The narrative that China’s economy is nearing its peak – or has already reached it – has taken hold in Western media. But if you read the doomsayers’ analyses carefully, you will find that many of the reasons they give for their bleak assessments are not new. On the contrary, they tend to highlight precisely the same challenges that economists and commentators have been harping on for at least a decade or longer. If China was not sputtering then, why should we believe it is now?

China’s economic performance over the last year has been disappointing – so much so that some observers argue that growth has already peaked, and that it is all downhill from here. But it is far too soon to write off China’s economic resilience.

Western economies faced tight monetary policies and rampant inflation in 2023, while Asia faced mixed growth. 2024 will likely bring disinflationary forces in the West, contrasting with continued economic deceleration in China.