Understanding the post-covid Chinese economy

The underperformance of the post-COVID Chinese economy in 2023 has attracted worldwide attention. By examining various indicators, this study confirms the conclusions observed by other researchers. This study offers a declining confidence approach to explain this underperformance. Based on the Baidu Index during January 2015 – January 2024, this study creatively constructs a Chinese confidence index and places the post-COVID Chinese economy into context. Trend data indicate that the Chinese confidence level was rising during 2015–2017 but began to decline persistently since 2018. This study then reviews a series of China’s foreign and domestic policies during this period, including the China-US trade war, supply-side structural reform, policies towards privately-owned enterprises, zero COVID policy, and national security policy, and concludes that they may have driven the rise and fall of Chinese confidence levels.