Why can't China turn its economy around?
The post-pandemic crisis puts pressure on Communist Party leaders

China's economy is stumbling, again. Slower-than-expected second-quarter growth statistics are putting "further pressure on the Communist Party" as its leaders gathered this week to plan the way forward, said The New York Times. Those leaders have tried to offset the country's longstanding real estate slump with a boost to export-driven manufacturing, but that has led to a "glut of goods, from chemicals to cars" and a backlash — in the form of tariffs — from countries whose leaders "fear the flood of Chinese goods will overwhelm local industries." The result? China is "limping along precariously," said one analyst.
"Since late 2022, China's policymakers have introduced a slew of measures to try to revive the market," said The Wall Street Journal. It's not working. And "expectations are low" that this week's meeting — known as the "Third Plenum" — will offer a "significant course correction" to start truly turning the Chinese economy around. Instead, it's expected that President Xi Jinping will double down on his manufacturing-centric export strategy while neglecting efforts to boost spending by Chinese consumers at home. Economists are skeptical that would produce anything but a new round of trade wars. "The Chinese economy is foundering," said Cornell University's Eswar Prasad.
What did the commentators say?
The Third Plenum is intended to be about "long-term reform not short-term stimulus," said The Economist. In fact, the two aren't so easy to distinguish. One long-term problem: Consumer spending is "chronically weak in China." That's partly due to a "thin social safety net" that forces China's poorest households to scrimp and save instead of spend. Communist leaders could help goose that spending with a series of reforms, including "fatter state pensions and improved health care." To fix the economy now, though, any long-term reform must be accompanied "with further stimulus spending in the short term."
Subscribe to The Week
Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

Sign up for The Week's Free Newsletters
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.
"China must recognize that its fundamental recipe for success has not changed," the University of Hong Kong's Brian Y. S. Wong said in The South China Morning Post. In the post-Mao era, China exploded from a poor nation into the world's second-largest economy by opening its doors to the world. A burgeoning "Cold War II" between China and the West has recently shifted the focus to "intense strategic rivalries." The best thing to do now is make China newly welcoming to foreigners, "whether they are tourists, students or skilled labor." That open-door policy will be one of the "integral elements" of China's future economic success.
What next?
The low expectations were correct. Chinese leaders pledged to "better manage" the country's economy on Thursday, said Nikkei Asia. But there were "no clear bombshells and few details" about the plans or reforms going forward. "There's nothing hinting at China heading towards a different policy direction," said one analyst. What clues that emerged didn't hint at a new opening to the world, said The Associated Press. Instead, the Third Plenum issued a statement saying "national security is an important foundation for the steady and long-term development of Chinese-style modernization.”
The idea that China might overtake the U.S. as the world's largest economy "has been a fixation for policymakers and economists for decades," said Deutsche Welle. Now there's a new question: "Has China's economy peaked?" The country is burdened with a "heavy debt load, slowing productivity, low consumption and an aging population" and faces increasing tensions with the West. There's a possibility that "China's impending economic supremacy may be delayed, or never happen."
Sign up for Today's Best Articles in your inbox
A free daily email with the biggest news stories of the day – and the best features from TheWeek.com
Joel Mathis is a writer with 30 years of newspaper and online journalism experience. His work also regularly appears in National Geographic and The Kansas City Star. His awards include best online commentary at the Online News Association and (twice) at the City and Regional Magazine Association.
-
The Arab League's plan for Gaza
The Explainer Arab leaders reject Donald Trump's proposals to move Palestinians out of Gaza to create 'Middle East Riviera'
By Elizabeth Carr-Ellis, The Week UK Published
-
Thrilling must-see operas for 2025
The Week Recommends From Carmen to Peter Grimes, these are the UK's top productions
By Irenie Forshaw, The Week UK Published
-
There is a 'third state' between life and death
Under the radar Cells can develop new abilities after their source organism dies
By Devika Rao, The Week US Published
-
Trade wars, explained
The Explainer Free trade is almost always good for any economy – so why is it so unpopular?
By The Week UK Published
-
Can the US Steel-Nippon Steel merger come back to life?
Today's Big Question President Trump opposed the deal. But he could be flexible.
By Joel Mathis, The Week US Published
-
Trump's China tariffs start after Canada, Mexico pauses
Speed Read The president paused his tariffs on America's closest neighbors after speaking to their leaders, but his import tax on Chinese goods has taken effect
By Peter Weber, The Week US Published
-
Pros and cons of tariffs
Pros and Cons Mainstream economists are 'generally sceptical' levies on imports can protect domestic industries and promote prosperity
By The Week UK Published
-
Chinese AI chatbot's rise slams US tech stocks
Speed Read The sudden popularity of a new AI chatbot from Chinese startup DeepSeek has sent U.S. tech stocks tumbling
By Peter Weber, The Week US Published
-
What went wrong at Stellantis?
Today's Big Question Problems with price and product
By Joel Mathis, The Week US Published
-
Why is China targeting Nvidia? (And why is the AI giant so important?)
Today's Big Question A new front in the 'chip war' with the US
By Joel Mathis, The Week US Published
-
Russia's currency crisis as sanctions bite
The Explainer Rouble plunges to lowest rate against dollar since invasion of Ukraine as economic toll finally begins to be felt
By Elliott Goat, The Week UK Published