Incentives from the government are positive effect. In the next stage, the import and export power of private enterprises will be unleashed. This, in turn, will stimulate private investment. All factors point to a full economic recovery.

The United States has seen consistent monthly growth throughout the year, but certain risk factors are accumulating. The future trajectory of the U.S. economy will depend on the relative development of economic growth drivers and the potential risks. China must respond thoughtfully.

The Chinese economy is underperforming relative to its growth potential. Not only are investment and consumption demand weaker than hoped, but the country is facing the challenge of two Ds: deflation and debt. While consumer-price inflation is close to negative territory, producer-price inflation has already been negative for a year. At the same time, the private and public sectors have accumulated massive debts, owing to higher spending during the pandemic and the broader response to the easy-money conditions of previous years.

China’s aggregate demand has weakened significantly over the past three years. In addition to the enduring effects of China’s anti-COVID policy, the country has also been weighed down by the decrease in global demand. Exports fell by 14.5% year on year in July, a stark contrast from the robust 17.2% export growth recorded in July 2022. Given these downturn pressures, the government’s decision not to announce a massive stimulus package, as many had anticipated, has left foreign and Chinese observers deeply perplexed.

China's economic slowdown is no longer the main contributor to global growth, but the rising strength of developing Asian economies offers hope for sustained global economic activity in 2023.

GDP in the first half of 2023 increased 5.5 percent year-on-year as the country steadily left the COVID crisis behind. But the goal is not just short-term GDP improvement. If China sticks to its people-centered approach, it will create an ongoing pattern of high-quality development.

China's economy is at a crossroads. As its old model of development faces challenges, it will require a shift to consumption-driven growth despite challenges in the private sector.

China has boasted the world’s largest population for hundreds of years, but with challenges brought about by mandatory birth limits and rapid economic growth, China is now faced with a population decline that likely will endanger Xi Jinping’s goal of moving China into the ranks of rich countries.

Despite setbacks, the Chinese government is confident that the long-term positive trajectory of the country’s economy will continue uninterrupted. The effects of macroeconomic policy will continue to emerge, market demand will gradually recover and the supply structure will adjust.

Before Deng Xiaoping launched China’s reform and opening up, the People’s Republic was working to establish a self-sufficient economy. But after dec