China slowing - is the centre of economic gravity shifting again?

Is the centre of gravity shifting in the world economy? Revised forecasts from the World Bank reported in the Guardian suggest that China, the world’s second-largest economy, is projected to grow by only 2.8 percent in 2022 and 4.5 percent in 2023.

China accounts for 86% of GDP in the Asia-Pacific region but their growth rate is set to lag the region for the first time in more than thirty years. This Guardian article provides some background.

Persistent covid-related production lockdowns have hit domestic consumption and manufacturing output.

We are seeing more frequent stories of transnational companies opting to re-locate production – for example Apple’s decision to switch iPhone assembly to Vietnam and India.

The perennial questions of “will China grow old before she grows rich?” and “can China escape the middle-income trap?” remain!