LONDON - The Economist Intelligence Unit (EIU) expects China’s GDP to grow by a reasonable 4.7% in 2023, but risks abound.
Periodic Chinese covid lockdowns are still likely. The country’s property bubble looks perilously close to bursting. And the coming slowdowns in America and the EU, huge export markets, could dent Chinese growth.
What if China goes into recession in 2023? This would mean a weaker Chinese appetite for imports, pushing down global metal and energy prices.
Fewer imports would translate into less production of everything from apparel to solar panels. The impact would land hard in Shenzhen, the world’s biggest source of electronics.
Also feeling the pain would be countries that provide goods to China: think of America, Japan and South Korea, which sell China cars, aeroplanes and much else. Worried companies would include Tesla, keen to boost sales in the biggest electric-car market.
Also smarting would be American and EU consumer brands hoping to sell more in China to offset slowdowns at home. Among Chinese firms, property developers could be slammed by bad loans.
The fallout from that would be felt worldwide, roiling stockmarkets and punching a hole in global growth.