China's economic miracle is not over — but it is entering a more challenging phase. The property sector crisis, demographic pressures, and geopolitical tensions with the West are creating headwinds that Beijing's policymakers are struggling to address.
The Property Crisis
China's property sector — which accounts for roughly a quarter of GDP — is undergoing a painful contraction. Major developers have failed; millions of homes sold but unbuilt remain a political liability.
The Demographic Challenge
China's population is now declining. The working-age population peaked several years ago. The era of cheap, abundant Chinese labour is ending.
Xi's Response
President Xi has responded to economic difficulty with political consolidation, state-directed industrial policy and increased pressure on private enterprise.
Implications for Britain
UK-China relations require careful management. Economic engagement offers real benefits; strategic risks must be honestly assessed and actively managed.
