A Crisis of Confidence Is Gripping China’s Economy
China's economy is facing a series of crises, including a real estate and debt crisis, record joblessness, and a growing lack of confidence, leading to decreased spending and investment.
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Posted 8/25/2023, 4:01:05 PM
nytimes.com
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China's economy, which has been a model of growth for the past 40 years, is facing deep distress and its long era of rapid economic expansion may be coming to an end, marked by slow growth, unfavorable demographics, and a growing divide with the US and its allies, according to the Wall Street Journal.
China's economic slump is worsening due to the prolonged property crisis, with missed payments on investment products by a major trust company and a fall in home prices adding to concerns.
China's largest private real estate developer, Country Garden, is in financial trouble, missing bond payments and posting a record loss, signaling further concerns about the country's property sector as housing prices and foreclosures continue to rise, while other economic indicators, such as industrial output and retail sales, fall short of expectations; these developments are raising concerns about the overall health of China's economy and its future growth prospects.
China's weak economy, including an unstable property market and weak consumer demand, is posing risks to global markets and economies like the US, according to experts.
China's stuttering economy poses a major threat to global commodities demand, as economic activity and credit flows deteriorate, and structural challenges and weaknesses in various sectors, including base metals, iron & steel, crude oil, coal & gas, and pork, affect the market.
China's economic challenges, including deflationary pressures and a slowdown in various sectors such as real estate, are likely to have a global impact and may continue to depress inflation in both China and other markets, with discounting expected to increase in the coming quarters.
China's economy is struggling and facing a lurching from one economic challenge to the next due to failures in economic policy and the centralization of power under President Xi Jinping, which is causing bad decision-making and a decline in living standards.
China's unexpected economic slowdown, driven by excessive investment in the property sector and local government spending, is leading experts to question whether a collapse is imminent, although they believe a sudden collapse is unlikely due to China's controlled financial system; however, the slowdown will have implications for global growth and emerging markets, particularly if the U.S. enters a recession next year.
China's real-estate market is experiencing a significant downturn, with Evergrande's bankruptcy filing signaling broader economic struggles that will have worldwide ramifications, impacting the global economy, commodities demand, and potentially leading to geopolitical tensions as China seeks to redirect the restless energy of its unemployed youth.
China's economic slowdown, coupled with a property market bust and local government debt crisis, is posing challenges to President Xi Jinping's goals of achieving economic growth and curbing inequality, potentially affecting the Communist Party's legitimacy and Xi's grip on power.
China's current property crisis is not as severe as the 2008 Lehman Brothers collapse, according to the Taiwan Institute of Economic Research (TIER).
China's economic model, driven by industrialization and exports, is showing weaknesses with an imbalanced economy, low demand, slumping trade, and a struggling property sector, highlighting the need for structural reforms to boost domestic consumption and confidence.
China's economic slump, including a real estate crisis and high youth unemployment, coupled with rising tensions with the West, could lead to deflation and sluggish growth that could spread to the rest of the world, impacting global GDP growth and potentially causing a new normal of slower economic growth.
China's economy is facing challenges, with youth unemployment at a record high, mismatched skills in the job market, and the risk of falling into the middle-income trap, jeopardizing President Xi Jinping's goal of turning China into a high-income nation.
China's economy is struggling due to an imbalance between investments and consumption, resulting in increased debt and limited household spending, and without a shift towards consumption and increased policy measures, the economic slowdown may have profound consequences for China and the world.
China is facing increasing financial stress as a property giant seeks to avoid default and a state-run bad debt manager experiences a bond slump, contributing to concerns about the country's economy.
China's economic troubles, including a real estate crisis, an aging population, and rising debt, resemble Japan's long-standing issues, leading some experts to predict a potential "lost decade" for China similar to Japan's economic stagnation in the 1990s, while Japan is showing signs of climbing out of its deflationary nightmare.
China's economy is facing significant challenges, including a property crisis, youth unemployment, and a flawed economic model, but the government's limited response suggests they are playing the long game and prioritizing ideology over effective governance.
China's failure to restructure its economy according to President Xi Jinping's bold reform plans has raised concerns about the country's future, with the possibility of a financial or economic crisis looming and a slow drift towards stagnation being the most likely outcome. The three potential paths for China include a swift, painful crisis; a gradual winding down of excesses at the expense of growth; or a switch to a consumer-led model with structural reforms that bring short-term pain but lead to a faster and stronger emergence.
China's economy has faced numerous challenges in 2023, including deflation and a property crisis, but another significant threat is the increasing number of wealthy individuals leaving the country, contributing to a brain drain.
China's economic boom, once seen as a miracle, now appears to be a mirage due to failed reforms, an outdated reliance on old economic models, and a growing debt burden, raising concerns about the nation's economic future and the potential for a financial crisis.
The prospect of a prolonged economic slump in China poses a serious threat to global growth, potentially changing fundamental aspects of the global economy, affecting debt markets and supply chains, and impacting emerging markets and the United States.
China's economic growth has slowed but has not collapsed, and while there are concerns about financial risks and a potential property crisis, there are also bright spots such as the growth of the new energy and technology sectors that could boost the economy.
China is showing signs of a balance-sheet recession similar to Japan's, with accumulating debt and falling house prices, but there are key differences that suggest it may not face the same fate. State-owned enterprises and property developers account for much of China's debt, and households have low debt relative to their assets. However, the Chinese government's reluctance to increase spending could prolong the recession.
China's economy is at risk of a financial crash due to its property bubble and soaring debts, according to market veteran Ruchir Sharma.
China's real estate and construction sectors are struggling, leading to fears of economic stagnation as consumer spending declines and other areas of the economy are not growing fast enough to make up the difference.
China's government is downplaying its economic crisis by promoting positive narratives, while social media campaigns and state-run newspapers attack Western media outlets for biased reporting; however, reports suggest that the property sector downturn is causing significant ramifications, and growth projections for China have been downgraded by major banks.
China's struggling economy, including its deflation and property crisis, will have a significant impact on the US due to its high foreign investment exposure in China and the dependence of key exporting countries like Chile, Australia, and Peru on the Chinese market.
China's housing crisis continues as thousands of building projects are halted or slowed, leading to defaults and restructuring, a loss of confidence in the market, and a decline in sales.
Signs of improvement in China's economy, such as improving credit demand and easing deflationary pressures, may not be enough to stabilize the economy due to bigger concerns of decreasing affordability, tight wages, and rising costs that have not been addressed. A comprehensive policy revamp may be necessary for China's economy to recover.
Chinese city and provincial governments are struggling with a financial crisis caused by a mountain of debt, leading to desperate measures such as fining restaurants and truck drivers, as they grapple with the economic impact of the COVID-19 pandemic and real estate slump.
China's economic woes may not be catastrophic as its policymakers and the country's vast resources, coupled with its massive economy and global interconnectedness, offer potential for recovery despite mounting financial and geopolitical pressures.