Stresses and contradictions in the Chinese economy in the early 2020s

EPRS invites leading experts and commentators to share their thinking and insights on important topics of relevance to debate in the European institutions. In this paper, Jacob Funk Kirkegaard, Senior Fellow at the Peterson Institute for International Economics and the German Marshall Fund of the United States, looks at the current state of the Chinese economy, and at the various factors likely to influence its evolution in the coming years. He argues that Chinese growth will slow to below the levels of the past decades, but that a devastating financial crisis is unlikely. Nevertheless, the changing pressures felt domestically will also influence China's foreign economic policy vis-à-vis other major economies, including the EU.