11 articles · Updated · South China Morning Post · May 4
The Tsinghua dean and former central bank policy committee member says China remains a middle-income economy with a population more than 10 times Japan's.
He argues that gives China more room for growth and stronger returns from innovation, while Chinese companies are better at commercialising technology at scale.
Bai also says concerns about China overcapacity and a widening US tech gap are often imprecise, as Beijing seeks ways to spur entrepreneurship amid property, prices and jobs strains.
Is China truly avoiding Japan's 'lost decades,' or are its deep economic flaws leading it down the same path?
Is China's green tech boom a gift to the world or a new 'shock' that will crush global competition?
Can China's robotics revolution succeed without triggering a massive unemployment crisis for its own citizens?
From Property Crisis to Tech Ambitions: China’s Complex Growth Path in 2026
Overview
China's 2025-2026 economic growth faces significant challenges, with a major property market downturn reducing GDP growth by 1.2 percentage points and causing persistent deflationary pressures. This slump suppresses household wealth and consumer confidence, deepening weak domestic demand and overcapacity in manufacturing. In response, the government implements policies to curb destructive price competition and focuses on fostering growth in technology and digital sectors, which contribute positively but cannot fully offset real estate losses. Demographic shifts, including a declining working-age population, necessitate a shift toward productivity and innovation. Meanwhile, heavy local government debt strains fiscal resources, prompting cautious stabilization efforts. Geopolitical tensions further risk disrupting supply chains, complicating China's path to balanced, consumption-driven growth.