China’s economic imbalance is affecting the world
Published 29 July 2025
"Under consumption and over capacity is a problem for China – and thus the world economy" says Chen Gang, deputy director of the East Asian Institute at the National University of Singapore.
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China’s persistent economic imbalance, marked by overproduction, overcapacity, and weak domestic consumption, risks fueling broader trade tensions beyond the US, including with the EU, India, and Southeast Asia. Efforts to boost consumption, such as the 2024 stimulus, have not been successful, with too much focus on infrastructure and too little on incomes. Additionally, mixed signals from looser monetary policy alongside new austerity measures are compounding the problem. Austerity measures could affect 40–50 million people, dampening consumer sentiment further, as seen in record restaurant closures, a shrinking luxury market, and deflationary pressures. Fundamental reforms to shift from supply-driven to demand-driven growth are essential for China to achieve a more balanced and sustainable economic structure.
About the NPF International Trade Fellowship 2025
The National Press Foundation holds an annual International Trade Fellowship workshop for journalists, sponsored by the Hinrich Foundation. This year, the Foundations welcomed 25 Asia-based journalists at the Hinrich Foundation’s office in Singapore. The sessions, held in June, focused on a range of themes including global trade policy, the age of data, the macroeconomic outlook, climate change, Asia’s place in a fast-changing world order and more.
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