ExplainerHow is China’s regulatory crackdown already hurting its economy?

China’s move to clamp down on industries ranging from steel to education to property has roiled financial markets and curbed the outlook for growth

President Xi Jinping still said this week that China will strive to complete major economic and social development targets set for this year

3-MIN READ3-MIN

Beijing has pledged to reduce steel output in a sector that contributes more than 15 per cent of national emissions. Photo: AP

Published: 12:00am, 27 Aug 2021

China’s campaign to clamp down on industries ranging from steel to education to property has roiled financial markets and curbed the outlook for growth in the world’s second-largest economy.

Beijing has signalled there is more regulation for businesses in years to come, but economists say authorities will need to carefully manage the pace and intensity of that against an economy weakening faster than expected this year following fresh virus outbreaks in the country.

China will strive to complete major economic and social development targets set for this year, the People’s Daily said on its front page Thursday, citing President Xi Jinping. Xi made the comments during his visit to the northern province of Hebei.

And while it is difficult to quantify the direct effect of the regulatory restrictions on growth, how are some of them are playing out in the economy already?

Decarbonisation Push

China has set an ambitious goal of becoming carbon-neutral by 2060, a challenging target given it has not even reached its emissions peak.