China's 'new normal' is emerging

Helped by incremental policy support, China's GDP growth is likely to be in line with the "around 5 percent" growth target. Looking ahead, we (at UBS Global Wealth Management) expect GDP growth in 2024 to settle in the mid-4 percent range as the real estate sector's weakness continues and the economic boost following the post-COVID-19 reopening of the economy fades. But more than 5 percent growth is possible if active policy easing continues, consumption recovery runs its full course, and the property market stabilizes.

In the longer term, China will enter a medium-growth period with potential GDP growth of 4-4.5 percent in the coming five to 10 years (compared with the nearly 6 percent over the past decade and 10 percent in the early 2000s). But if the transition goes as planned, the Chinese economy's sheer size means it could still contribute a third of global growth, with per capita GDP doubling to about $25,000 by 2035(from $12,720 in 2022).

As the Chinese economy shifts to higher-quality development, new drivers are emerging to shape China's growth path. Among these, we believe mass consumption, green transition and industrial upgrading would be the key drivers of China's growth in the future.