China's economy in the Year of the Dragon: Hope despite weaknesses and challenges - A financial expert reports on current developments.

China's economy in the Year of the Dragon: Hope despite weaknesses and challenges - A financial expert reports on current developments.

According to a report from www.merkur.de, the Chinese economy is weakening at the beginning of the Year of the Dragon. Despite increased growth of 5.2 percent in 2023, growth of only 4.5 percent is expected this year. The problems include declining birth rates, youth unemployment, and foreign direct investment, which is declining.

China's problems have far-reaching effects on the global market. With growth expected to decline to just 3.4 percent in 2028, Western companies in particular will be looking for alternatives for their investments. This situation is already reflected in an 8 percent decline in foreign direct investment in the Chinese market in 2023.

China's financing options are also limited as the government debt ratio reached a record 55.9 percent in 2023. The government's efforts to invest in new economic sectors have paid off, particularly in the area of ​​renewable energy. With investment growth of 40 percent to 6.3 billion yuan in 2023, these sectors contribute significantly to overall economic growth.

Despite these challenges, companies should continue to monitor the Chinese market. Despite reduced growth, China remains of great importance due to its size and enormous market potential. However, high, dynamic growth cannot be assumed at the moment. China's current economic instability has caused many companies to look for new locations.

Although the situation in the Chinese economy is currently difficult, there is still hope in areas such as renewable energy, which are receiving large amounts of investment. Ultimately, the further development of the Chinese economy will be crucial for the global market.