China’s GDP expansion is currently underperforming that of the rest of Asia, marking a significant shift for a country that has long been known for its rapid economic growth. As China’s economy faces challenges such as a property crisis and high levels of youth unemployment, experts predict that the country will experience a decline in economic development compared to its Asian neighbors in the coming years.

The latest data from HSBC, compiled as of November 2024, provides insights into the projected growth of per-capita GDP in various Asian countries from 2023 to 2026. This information highlights the disparity between China’s economic performance and that of other nations in the region, particularly India and Southeast Asian countries.

During the period from 2023 to 2026, India and Southeast Asian countries are expected to achieve an average per-capita GDP growth rate of 6.5%. Factors such as significant foreign and domestic investment, a thriving technology sector, a growing middle class, and a youthful demographic are believed to drive the economic expansion of these countries.

In contrast, China’s average per-capita GDP growth rate is projected to be significantly lower at 3.9% over the same period. This disparity has prompted Chinese leaders to consider implementing more robust stimulus measures to boost consumer demand and address economic challenges.

Senior Chinese officials have proposed strategies such as interest rate reductions and increased government spending to stimulate economic growth. However, experts like Robin Xing, the chief China economist at Morgan Stanley, suggest that the Communist Party faces a “long battle” to revitalize the economy.

Xing emphasized the need for a careful balance of policies focused on stimulating consumption and reforming social safety nets to support economic recovery. While he anticipates that 2025 will be a challenging year for China, Xing remains hopeful that by 2026, the country will identify the right policy mix to drive sustainable growth.

The underperformance of China’s economy in comparison to other Asian nations raises concerns about the country’s future economic trajectory. As China grapples with structural challenges and global uncertainties, it will be crucial for policymakers to implement effective strategies to support sustainable and inclusive growth.

One area of focus for China is addressing the property crisis, which has posed challenges for the country’s real estate market and overall economic stability. A combination of factors, including housing affordability issues and rising debt levels, has contributed to the ongoing property crisis in China.

In addition, elevated levels of youth unemployment present a significant challenge for the Chinese economy. With a large and increasingly competitive workforce, young people in China face difficulties in securing stable employment opportunities, which can have long-term implications for economic growth and social stability.

To address these challenges and stimulate economic growth, Chinese leaders are likely to explore a range of policy measures aimed at promoting investment, innovation, and consumption. By fostering a more dynamic economic environment and investing in key sectors such as technology and infrastructure, China can pave the way for sustainable growth in the years ahead.

Despite the current economic challenges facing China, the country remains a key player in the global economy and a driving force for innovation and development in Asia. By leveraging its strengths and addressing its weaknesses, China has the potential to overcome its current obstacles and achieve renewed economic prosperity in the future.