The End of China’s Economic Miracle

After its rebound from the COVID-19 pandemic, the Chinese economy has slumped.

China’s relaxation of its harsh COVID-19 restrictions initially boosted a moribund economy that had languished under the weight of forced sequestration, government-mandated testing and seemingly endless supply-chain shutdowns. Early 2023 saw an increase in domestic tourism and retail business. Yet by the middle of the year, growth had declined: Private sector investment and durable goods consumption had slowed markedly. Citizens preferred putting their savings into liquid bank accounts to making long-term investments.

China’s financial markets and economy are suffering from a bout of “long COVID.” This economic reversal is the latest iteration of a trend underway...