China’s flagging economic performance is a crucial issue for Beijing and for the wider world. The domestic impact of slowing growth is mounting as labour unrest spreads, youth unemployment spirals, and weak property prices make families feel poorer. News that China has officially fallen into deflation, with consumer prices dropping 0.3 per cent last month, has raised concerns that its economy will become trapped in a downward spiral.
Sputtering Chinese growth — if it persists — is set to have an outsized international impact as many economies struggle to recover from the pandemic. In May, the IMF forecast China would grow at 5.2 per cent this year, contributing 35 per cent to global growth.