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The World Bank raised its near-term economic forecasts for China while reiterating calls for President Xi Jinping to pursue deep reforms to address declining confidence and structural problems in the world’s second-largest economy.

The multilateral bank said on Thursday that it had revised its forecasts to… ChinaGDP growth next year will rise by 0.4 percentage point to 4.5 percent, reflecting a series of policy easing measures announced by Beijing over the past three months, as well as the strength of the country’s exports.

The World Bank also raised its full-year forecast for this year by 0.1 percentage point to 4.9 percent, slightly below Beijing’s 2024 growth target of about 5 percent. The economy recorded growth of 4.8 percent in the first nine months of the year.

The lender also noted Recent pledges By economic planners under Xi to improve support for social welfare and consumption, and also to implement fiscal and tax reforms. But she said more details were needed to boost household and business confidence.

“Traditional stimulus measures will not be sufficient to stimulate growth,” the World Bank said, reiterating its calls for deeper reforms in the areas of education, health care, welfare protection, pensions and social reforms in China. Hoku Family registration system.

China’s economic growth has slowed this year Weak local demand And deep deflationary pressures, following a three-year slump in the real estate market that has hurt household wealth.

Xi has shifted economic focus towards investment in manufacturing and high-tech industry, but there are growing concerns that exports, which have helped support growth, will decline. It faces a renewed threat of tariffs under Donald TrumpWho will return as President of the United States next month.

The World Bank also released a new analysis of China’s economic mobility for the period 2010-2021, which showed that more than half a billion people are at risk of falling out of the middle class after just one generation of emerging from poverty, according to the World Bank. Definitions.

The bank credited Beijing with the “great success” of lifting 800 million people out of poverty over the past forty years, and noted that during this period the share of the low-income population fell sharply, from 62.3 percent to 17 percent.

But it also found that 38.2 per cent of China’s 1.4 billion people were in the “weak middle class” – above a defined low-income line, but not “free from the risk of falling below it”. The low income level was defined as up to $6.85 per day using 2017 purchasing power parity calculations.

“No other region in the world has seen the share of the secure middle class population increase faster than China,” the World Bank said. “However, a large majority of the population is not yet economically secure.”

This vulnerable segment of the population was larger than the 32.1 percent considered “safe” in the middle class and the 17 percent that remained low-income as of 2021, in the middle of the Covid pandemic.

Bert Hoffman, the World Bank’s former China country director based in Beijing and now at the National University of Singapore, wrote earlier this month that the lackluster performance of China’s post-Covid economy exposed vulnerabilities that had arisen since the last major reform. for financial policy. System in 1994

However, he pointed to some “hopeful signs” that reforms are in the works, following statements by policymakers in the second half of 2024 that indicated improved income distribution and social security.

“Financial reforms are now clearly linked to the Chinese Communist Party’s core goal of ‘high-quality growth,’ and the leadership recognizes that reforms must lead to a financial system capable of efficiency, fairness, and stability,” Hoffman wrote in an article. Asia Society 2025 Outlook.

“The key question is whether the reforms will go far enough to transform fiscal policy into a powerful instrument for resource allocation, economic stability, and income distribution.”