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 economy is facing a downward spiral due to a crisis in the debt-laden property sector, prompting seven city banks to reduce their growth forecasts for the country; concerns include falling into deflation, high unemployment rates, and the need for more proactive government support.
China is making efforts to restore confidence among businesses and consumers after crackdowns on the private sector and harsh Covid restrictions have negatively impacted its economy.
Beijing needs to provide clarity on its economic plans and the national security crackdown in order to rebuild confidence in the future trajectory of China and address uncertainties, according to the head of a European business lobby in China.
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.
The risks of China's economic slowdown have not been factored into the markets yet, according to Insigneo Chief Investment Officer Ahmed Riesgo, who believes that the crisis of confidence in China's economy will soon become a major global risk.
China's economy is facing challenges with slowing growth, rising debt, tumbling stock markets, and a property sector crisis, and some analysts believe that heavy-handed government intervention and a lack of confidence are underlying causes that cannot be easily fixed. However, others argue that China's problems are solvable and that it remains a superpower despite its considerable problems.
China's economic weakness may pose challenges for developing economies and regions that rely on it, but the US economy is well positioned to navigate these headwinds with its investments and resources, according to US Deputy Treasury Secretary Wally Adeyemo.
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 economic slowdown is causing alarm across the world, as it is expected to have a negative impact on global economic growth, leading to reduced imports and trade, falling commodity prices, a deflationary effect on global goods prices, and a decline in tourism and luxury spending.
Investors are becoming increasingly concerned about the state of China's economy as informal gauges, such as PMI surveys and soft surveys, indicate a deep-seated confidence problem and a potential miss of the country's 5% growth target this year, leading to a retreat from global assets exposed to the slowdown.
A potential economic downturn in China may have implications for other countries, but the impact on the United States is expected to be minor due to limited exposure to China's economy.
China's economic downturn is not as severe as many people believe, according to Nicholas Lardy of the Peterson Institute for International Economics.
Many ordinary Chinese are experiencing a widespread economic slowdown characterized by pessimism and resignation, despite Beijing's attempts to downplay concerns and project a positive narrative.
Even as the United States tries to reduce its reliance on Chinese goods, research suggests that global supply chains remain deeply interconnected, with Chinese products making their way into America through other countries. Changes in trade relationships and supply chains have caused China's share of US imports to decline, but countries like Vietnam and Mexico have seen an increase in imports from China, indicating that Chinese firms are still heavily involved in the supply chains. This reshuffling of supply chains has led to higher prices for goods and calls into question whether the US has truly lessened its dependence on China.
China defends its business practices and claims that most U.S. firms want to stay, despite Commerce Secretary Gina Raimondo stating that China has become "uninvestible" due to fines, raids, and other actions that make it risky to do business there.
US companies are becoming increasingly hesitant to invest in China due to concerns over new anti-spying laws, competition from state-funded firms, and the country's economic challenges such as deflation and a property crisis.
UBS reports higher than expected profits, job creation in the US slows, and markets rally on weaker economic data and hope for a pause in interest rate hikes. China's factory activity shrinks but at a slower pace, while retail sales increase. There are opportunities for investors in other Asian markets.
China's economy is portrayed as irrecoverably declining in the eyes of Western mainstream media.
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.
Fears about the health of the global economy have intensified as service sector activity in China, the eurozone, and the UK shows signs of weakness, leading to a drop in share prices in Asia and a decline in the pound against the US dollar.
China's economic challenges and failed rebound post-Covid are causing U.S. investors and businesses to view Chinese exposure as a liability, leading to underperformance in companies with high China exposure and potential bans on foreign devices, signaling a potential decline in China's economic growth.
Despite the risks and challenges of doing business in China, many Western companies still see it as a long-term bet due to its economic potential, but they are increasingly cautious and aware of the hazards they face.
US companies with significant revenue exposure to China are at risk due to the country's struggling economy, characterized by high youth unemployment rates and recent property defaults, according to Bank of America.
China's economy has consistently outperformed other major economies in the past four years, but the US is spreading false narratives and propaganda to hide this reality, according to John Ross, former director of economic and business policy for the mayor of London. The US has two motives: discouraging foreign investment in China and influencing China's political and economic policies.
China's economic problems are more likely to impact its neighboring countries and Europe than the United States, according to U.S. Deputy Treasury Secretary Wally Adeyemo, who emphasized the need for China to address its structural economic issues.
Big Japanese manufacturers and the services sector in Japan are experiencing a decline in confidence, with concerns of a slowdown in China's economy affecting global and domestic growth, according to a Reuters poll. The weak sentiment in the business sector raises doubts about the ability of exports to drive economic recovery amid weak domestic demand. Many companies cited high input costs and weak demand as contributing factors, along with geopolitical risks and tensions between the US and China.
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.
Summary: U.S. stocks slumped amid mixed sentiment about the economy, with only the Dow Jones Industrial Average rising for the week, while Asia-Pacific markets mostly fell, and China's venture capital investment dropped by 31.4% compared to 2022 due to its sluggish economy and geopolitical tensions discouraging foreign investors.
Pessimism among U.S. businesses operating in China is on the rise, with a record low percentage of firms optimistic about their five-year outlook, according to a survey by the American Chamber of Commerce in Shanghai, driven by concerns over geopolitics and a slowing economy.
China's economic model is in decline and will have a significant impact on global markets, according to veteran investor David Roche, who predicts long-term struggles for manufacturing-based economies and warns of potential social unrest and geopolitical problems.
The outlook of U.S. companies on China's markets in the next five years has hit a record low due to factors such as political tensions, tariffs, slow Covid recovery, and issues in the real estate market; however, complete decoupling between the two economies is unlikely.
UBS Investment Bank suggests that the stock slump in China is almost over and investors should be more optimistic about the market outlook, as economic fundamentals have improved and technical signals indicate a potential market rebound.
U.S. companies are losing confidence in China and some are limiting their investments due to tensions between the two countries and China's economic slowdown.
Chinese officials express confidence in the country's economic outlook, despite projections of weakness by institutions such as the Asian Development Bank and the Organization for Economic Cooperation and Development, citing improved factory output and tourism figures as signs of recovery.
US companies' optimism about their business prospects in China is at a record low, with US-China tensions and negative effects on businesses being the biggest challenges, according to a survey by the US-China Business Council. Despite the low optimism, China remains a top-five priority market for 74% of companies surveyed.
China's President Xi Jinping emphasizes the need for reform and opening up the economy as foreign investors consider leaving, calling for a greater opening up of free-trade zones and a focus on playing by international trade rules. Despite these efforts, China's foreign direct investment has fallen and US businesses remain skeptical due to regulatory uncertainties and geopolitical risks.
China's growth is expected to slow down in 2024, with the World Bank attributing the gloomy outlook to a slowdown in China, weak indicators, stagnant house prices, increased household debt, and trade tensions with the US.
China's trade slump is gradually easing as September's exports fell less than expected, indicating a potential bottoming-out of global trade; however, uncertainties in the property sector and weak confidence among private firms continue to pose risks to the country's economic recovery.
China's economy is facing uncertainties due to concerns about the property crisis, a lack of confidence, and a slowdown in year-on-year GDP growth, which is expected to be below Beijing's target of around 5%.
China may continue to cut its US debt holdings amid worries over shrinking liquidity and safety risks, as well as efforts to diversify foreign exchange reserves. China has reduced its US debt holdings for five consecutive months, while Japan and the UK have increased theirs. Experts believe China's actions are driven by the poor performance of US Treasury bonds, the need for more sophisticated foreign exchange reserve management, and concerns over geopolitical risks. The abuse of the dollar's hegemony status by the US has also damaged global trust in the greenback and contributed to a trend of de-dollarization.