China’s economy expected to grow 8% in 2021: World Bank
The World Bank has forecast China’s economy to grow 8% in 2021, a downward revision to the group’s June forecast of 8.5%.
Economic activity in the country cooled in the second half of this year after a strong rebound in the first half, the World Bank said in a report released on Wednesday.
China’s third-quarter economic growth slowed to 4.9 percent year-on-year after expanding 7.9 percent in the second quarter and 18.3 percent in the first quarter.
“The slowdown reflects less favorable base effects, less export support and the government’s continued deleveraging efforts,” the World Bank said.
He pointed out that downside risks to China’s economic outlook have increased, which include further national COVID-19 outbreaks and a severe and prolonged downturn in the heavily indebted real estate sector.
The World Bank noted that ongoing efforts to tackle excessive indebtedness in the corporate sector should be maintained in the short term, and that the country faces a difficult rebalancing as it aims to shift to growth of high quality in the medium term.
The country faces three major challenges, according to the World Bank. They are moving towards greater dependence on consumption and services, a greater role for markets and the private sector, and towards a low-carbon economy.
He also suggested that China further open up the sheltered service sector, support rebalancing towards domestic consumption tax reforms, and make extensive use of green financing instruments and carbon pricing alongside power sector reforms.