China Economic Update - June 2015

How did the Chinese economy perform recently? What are the prospects for it? Karlis Smits, World Bank Senior Economist based in Beijing, provides an update.

World Bank Group

Key Findings

Recent Economic Developments

  • The transition to a more moderate—and more balanced—growth trajectory continues
  • The aggregate credit impulse moderated despite policy efforts to lower financing costs
  • Fiscal policy remains accommodative as quasi-fiscal expenditures tighten
  • Decelerating economic activity is affecting wages more than jobs in the urban labor market
  • Capital outflows have increased sharply as domestic and external conditions change

Economic Prospects

  • China’s growth will keep moderating as the transition to more sustainable growth consolidates
  • Balancing reforms and short-term demand management remains a priority in 2015
  • The transition to the “new normal” requires a better allocation of credit and indigenous capacity for innovation

Last Updated: Jul 02, 2015