China's economic slowdown to intensify, says World Bank; how it could strain East Asian economies

The country’s growth rate is expected to decline to 4.3% next year, down from an estimated 4.8% in 2024, according to the World Bank’s latest economic outlook.

The World Bank has warned that China’s economic growth will slow further in 2025, despite recent stimulus efforts aimed at boosting the economy. The country’s growth rate is expected to decline to 4.3% next year, down from an estimated 4.8% in 2024, according to the World Bank’s latest economic outlook.

Impact on Regional Economies

The slowdown in China’s economy will also affect neighbouring countries. Growth in East Asia and the Pacific, including Indonesia, Australia, and South Korea, is forecast to fall to 4.4% in 2025, from around 4.8% this year. For decades, China’s rapid expansion has had a positive impact on its neighbours, but this influence is now waning.

Recent fiscal measures, such as interest rate cuts, may offer a short-term boost to China’s economy. However, the World Bank stressed that long-term growth will depend on deeper structural reforms. China’s government set a growth target of around 5% for 2023, but that goal has become harder to achieve due to weak consumer demand and ongoing challenges in the property market.
 

Shifting global trade and investment patterns, along with rising policy uncertainty, could further strain the East Asia and Pacific region. US-China trade tensions have created new opportunities for countries like Vietnam, but stringent rules on imports and exports limit their potential.

The World Bank also highlighted how emerging technologies, including artificial intelligence and industrial robots, are reshaping labour markets. While AI threatens fewer jobs in the region compared to advanced economies, it also means these nations may struggle to fully harness the productivity benefits offered by such technologies.