The World Bank anticipates a further decline in China's growth in 2025, despite a temporary uplift from recent stimulus initiatives, which will add additional pressure on regional economies.

According to the lender's semi-annual economic outlook report, China's growth is projected to decrease to 4.3% next year, down from an estimated 4.8% in 2024. Consequently, growth in East Asia and the Pacific, which encompasses nations such as Indonesia, Australia, and Korea, is expected to slow to 4.4% in 2025, compared to approximately 4.8% this year.

The World Bank noted, "For three decades, China’s growth has positively impacted its neighbors, but the magnitude of this effect is now waning." It added that while recently announced fiscal measures may provide a short-term boost, sustainable growth in the long run will hinge on more profound structural reforms.

Chinese authorities had aimed for an economic growth target of around 5% this year, a goal that appeared increasingly unattainable by August due to weak consumer spending and a fragile property market. In late September, Beijing implemented a series of stimulus measures primarily focused on monetary policy, including interest rate reductions.

There is now a growing expectation for additional fiscal support to enhance spending, rebuild confidence, and stimulate the economy.

The World Bank's growth forecast for China this year aligns with estimates from a Bloomberg survey, although its 2025 prediction is slightly below the median estimate of 4.5%.

In addition to China's slowing growth, the World Bank indicated that shifting trade and investment patterns, along with increasing global policy uncertainty, could also impact the East Asia and Pacific region.

While trade tensions between the US and China have opened up opportunities for countries like Vietnam to connect major trading partners, the World Bank cautioned that "new evidence suggests that economies may increasingly be restricted to a ‘one-way connector’ role due to the implementation of stricter rules-of-origin on imports and export limitations."

The bank also analyzed the effects of emerging technologies, including industrial robots and artificial intelligence, on labor markets throughout Asia.

Due to the prevalence of manual labor in the region, a lower percentage of jobs is at risk from AI compared to more developed economies. However, this situation also indicates that the region is less equipped to capitalize on the productivity gains offered by AI, according to the World Bank.