For decades, China has been a reliable growth engine for the world. That time has come to an end. China’s economy is now one of the global portfolio’s biggest sources of uncertainty, and its growth will largely be determined by two factors: zero-COVID and the real estate market.
Contrary to what many had hoped, the zero-COVID policy will not be scrapped immediately following the 20th Party Congress. Instead, as China’s most vulnerable are still far from sufficiently vaccinated, we expect China to remain closed until it can roll out an mRNA vaccine developed by one of its own companies. In the meantime, it will continue to pursue a zero-COVID strategy that weighs heavily on growth.
Similarly, housing market issues are raising serious headwinds to growth. Highly leveraged developers, under pressure from dwindling sales, mortgage boycotts, and debt repayment deadlines, are struggling to complete projects. Government intervention will be required to stop the vicious cycle, but aid has not been forthcoming. The crisis’s outcome will shape China’s growth - both in the short and long terms.
Table of Contents
- Key uncertainty drivers for China's economy
- COVID-19 analysis and scenarios
- Real estate sector analysis and scenarios
- Scenarios for China's economy
- What to expect in the Base Case
- What to expect about Zero-COVID
- Suggested Actions
- Data and Methodologies
- Key Takeaways
Methodology
The author’s strengths include global management topics and country level analysis tailored for a senior executive audience. The research focuses on cross-industry implications of macroeconomic, geopolitical risk, and emerging trends that impact the strategic decisions of business decisionmakers.
Research analysts:
Almost all have advanced degrees in economics, international affairs, or political science, and are multilingual. Researchers have lived and worked in the markets they cover and are based in regional hubs close to market
- Analysts cover:
- Economic trends and indicators (near-term volatility, long-term forecasts); political developments (election results, post-election policy, regulations, spending, monetary policy), outlook for market demand and cost of doing business, upside and downside scenarios, MNC investment sentiment, business practices
- Quality control:
- Research workflows supported by standard, proprietary process maps, tools and templates for analysis and writing, forecast admin tool, and content management system
- Research managers pressure-test quality, consistency and usefulness of outlooks, scenarios, and suggested actions
- Analyst interactions with clients (>1500/year) provide ongoing feedback loops from on-the-ground operators to c-suite
- Research inputs include:
- Primary: Multinational and local executives (interviews, surveys, analyst consultations), international and local experts (NGO officials, academics, consultants), international and local government officials
- Secondary: Local-language news and international media, public/official data sources, government/association reports, Bloomberg
- Research outputs include:
- Forecast economic data, country/region outlooks and scenarios, market intelligence reports (monthly/quarterly for key countries as well as occasional Market Spotlights), as-needed analyst commentary alerts
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