China's economy will continue to slow as no clear growth drivers will emerge for years, top analyst says

• China's growth will slow further in 2024 as no sector can spark a rebound, Shehzad Qazi told CNBC.
• The country typically relies on the property market, but real estate won't come back as a key driver of GDP.
• But the market could see some improvements in the third quarter as support measures have some impact.

China's slowdown will deepen next year as none of the country's sectors can lead a broad rebound, China's Beige Book managing director told CNBC.

"The reality is, for the next several years looking at right now, there isn't an obvious growth driver in China," Shehzad Qazi said in a Thursday interview. "So you're going to have overall growth continuing to slow. I believe that 2024 will be slower than 2023 was."

Although some parts of the economy may offer support, investors can't expect a "champion" industry to lead China. For instance, continued demand in foreign markets could help maintain the manufacturing sector, but not at a level as to reverse this year's wider decline.

In prior years, the nation's massive property market has long been the key driver, accounting for nearly 70% of total household wealth and around a quarter of Chinese GDP.

However, heavy debt burdens and a string of defaults have battered the sector; the extent of the crisis was most recently made clear when high-profile developer Country Garden failed to meet a bond payment, spurring an investor race to the exits.

"Property will never go back to being the type of big massive driver of GDP and economic growth that it used to be," Qazi said, highlighting that real estate prices are now at record lows. 

Investors might expect some improvement in the first half of next year, as support measures, including lower mortgage rates, begin to show some effect. However, it's unrealistic to expect Beijing to provide an all-out rescue of the real estate sector, as authorities are looking to avoid reinflating the property bubble.

Qazi's outlook is shared by institutions such as the World Bank and International Monetary Fund, which both see China's GDP stalling further next year. The IMF projects growth in the country will fall to 4.6% in 2024, compared to this year's 5.4%.

In his view, investors were disappointed this year after overestimating China's rebound following the end to COVID-lockdown policies in the country. Although the country saw some organic recovery through the second and third quarter, it has once again lost steam, he said.