Beijing, January 9, 2025: As China enters 2025, it is grappling with significant economic challenges, with deflationary pressures and weak consumer demand raising concerns about prolonged stagnation. In December 2024, the country’s consumer prices increased by only 0.1% year-over-year, underscoring the persistent deflationary trends. Additionally, long-term bond yields in China have dropped to historic lows, falling below Japan’s for the first time, which has intensified fears of a “Japanification” scenario, where economic growth stagnates for an extended period.
In response to these economic difficulties, the Chinese government is introducing measures to stimulate growth, including subsidies to encourage consumer spending and efforts to stabilize the yuan. However, the effectiveness of these strategies remains uncertain, and experts predict that China’s economic path in 2025 could be challenging. With these ongoing issues, the nation’s economic outlook for the year remains uncertain, with many questioning whether these measures will be sufficient to reverse the current trends.
