As China's domestic consumption fails to keep pace with its industrial output, medium- and long-term economic and financial risks will continue to increase, as will tensions with major trade partners amid a wave of Chinese exports. China's annual real GDP growth has moderated to around 4.5%-5% in recent years, down from nearly 8% during the 2010-19 period, and is projected to continue declining in the medium term. A key cause of this slowdown is the structural imbalance between low domestic consumption and high domestic industrial output, which is lowering the price of goods and exerting deflationary pressure. These realities are depressing corporate investment, which, alongside fiscal constraints across municipal governments, risks pushing China's economy into a structural slowdown, potentially reminiscent of Japan's economic stagnation in the 1990s and early 2000s. To avert this scenario, China is attempting to balance its high supply and low demand by exporting its excess production.