We estimate that China’s trend rate of growth has slowed from 5.0% in 2019 to 3.0% now, based on our China Activity Proxy. This is a steeper deceleration than in the years leading up to the emergence of COVID-19. The official GDP data, while not fully reflecting the extent of recent weakness, are also consistent with a marked decline in trend growth. The main cause is not the pandemic but a structural shift in the property sector. This year’s underwhelming recovery is partly a consequence of this slowdown.
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