China's Forecast-Beating Economic Data Buys Officials Time to Figure Out Fix

• China's economy, valued at $18.6 trillion, has shown resilience in recent months, with indicators suggesting it has sidestepped immediate risks of decline. This positive trend offers some relief to policymakers who are navigating economic challenges.

• Despite the optimism, there are hurdles in the path of reigniting economic growth. Analysts are sceptical about China's ability to sustainably transform its growth model. The failure to achieve a sustained recovery post-lifting COVID restrictions in late 2022 has raised doubts about the efficacy of current strategies.

• While China has implemented various policy measures to stimulate economic activity, such as directing banks to increase lending to specific sectors and reducing reserve requirements, there are concerns about the diminishing effectiveness of these policies. Questions arise regarding the long-term sustainability of China's growth trajectory if these measures prove insufficient.

• The property sector, which has historically been a cornerstone of China's economy, is facing challenges that could impact overall economic stability. Despite efforts to bolster the sector, concerns persist about its potential to derail economic growth. This underscores the necessity for identifying sustainable growth drivers beyond short-term stimulus measures to ensure economic resilience.

(Source: Reuters)