China’s economy: from quantity to quality

China has underperformed its potential in 2023 but beats the government target. The issue is that weak growth in 2023 will not be balanced out. The dragon economy is now highly burdened with challenges. In the short term, the country needs to improve the bearish sentiments of private investors and consumers, and deleverage its construction sector. In the long term, China needs to expedite the transition from a quantity-driven and investment-led economy to a quality-driven and consumption-led economy to achieve our forecast. Along the journey, maintaining its leading position in the energy transition supply chain will be the country's biggest growth opportunity.