China’s consumer-confidence dip

China is facing a severe economic downturn, with record youth unemployment, a slumping housing market, stagnant spending, and deflation, which has led to a sense of despair and reluctance to spend among consumers and business owners, potentially fueling a dangerous cycle.

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 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.

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 economy has slipped into deflation for the first time in two years, raising concerns about its post-pandemic recovery and drawing comparisons to Japan's struggles with stagnant growth and deflation in the 1990s, as China faces challenges in its property sector and a need to shift towards consumer spending.

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 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 at risk of entering a debt-deflation loop, similar to Japan's in the 1990s, but this can be avoided if policymakers keep interest rates below a crucial level to stimulate economic growth.

China faces challenges in rebalancing its economy towards increased consumer spending due to the economic growth model that relies heavily on investment in property, infrastructure, and industry, as well as the reluctance of households to spend and the limited social safety net; implementing demand-side measures would require difficult decisions and potential short-term pain for businesses and the government sector.

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.

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.

Forecasters have decreased their growth expectations for China due to deflation, rising youth unemployment, and a property-market crisis, with GDP predicted to rise by only 5.1% in 2023 and 4.5% in 2024.

China's post-pandemic economic recovery has fueled growth in the internet sector, including e-commerce, ride-hailing, and online travel, with the number of internet users reaching 1.08 billion and online retail sales reaching 7.16 trillion yuan in the first half of 2023, according to a government survey.

China's economy will struggle with low growth under 5% through 2024, leading to a "structural hard landing" due to tight monetary policy, disappointing economic reopening, and challenges in real estate and stock markets, according to TS Lombard strategists.

If China were to slip into a deflationary spiral like Japan in the 1990s, it could lead to a decrease in consumer spending, a weakened economy, and negative consequences for the rest of the world, including a slowdown in imports for the US and adverse effects on developing economies reliant on Chinese exports and investment.

Chinese consumer spending has rebounded in certain sectors, but concerns persist over the property market and GDP growth falling below 5%, according to Shehzad Qazi, managing director of China Beige Book.

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 is facing a "new new normal" due to a declining population and weak confidence in its post-Covid recovery, prompting calls for systemic reforms to revive growth. The country's aging and shrinking population poses challenges to productivity, consumption, and long-term growth potential, leading major investment banks to cut growth forecasts. Policy adviser Cai Fang suggests relaxing population controls and focusing on expanding consumption as strategies to boost economic growth.

Falling prices in China, driven by a weakened economy, could benefit countries with elevated inflation such as the U.S., India, Germany, and the Netherlands.

China's economic slowdown, driven by a debt-ridden and overbuilt property sector, is not expected to have a significant impact on the global economy or US exports, although a prolonged downturn could have broader consequences. While companies like elevator maker Otis will feel the effects, China's reduced growth is unlikely to be contagious beyond its borders.

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.

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.

Forecasts for China's economic growth in 2023 and 2024 have been cut, potentially hindering the country's goal of becoming a "medium-developed country" by 2035 and surpassing the US as the world's No.1 economy.

China's economy is showing signs of slowing down, including a decrease in GDP growth rate, declining exports, deflationary consumer price index, high youth unemployment, a weakening yuan, and a decrease in new loans, which could have global implications.

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.

Policymakers expect slower growth in China, potentially below 4%, as the country transitions to a consumption-driven economy, which could have a negative impact on the global economy and alleviate inflationary pressures.

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.

China's measures to support the property sector, such as lowering mortgage rates, have limited impact on consumer spending due to the dire economic outlook and lack of longer-term reforms, highlighting the need for resources to be transferred to consumers from other sectors of the economy.

China's consumer price index rebounded in August after slipping into deflation in July, indicating a post-Covid economic recovery, despite sluggish domestic consumption and concerns of a relapse into deflation in the coming months.

China's consumer prices rose slightly and the decline in factory-gate prices slowed in August, indicating easing deflation pressures and signs of stabilization in the economy, although more policy support is needed to boost consumer demand.

China's consumer prices returned to positive territory in August as deflation pressures ease, but analysts warn that more policy support is needed to boost consumer demand in the economy.

China's foreign ministry rejects claims from the West that its economy is faltering, stating that the country's economy is resilient and has not collapsed.

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 unsustainable economic model, official corruption, mismanagement, and destruction of human capital through the one-child policy will contribute to the country's collapse and hinder its rise as a global power.

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.

China's economy requires three more years and increased fiscal spending to recover from the effects of the COVID-19 pandemic, according to think tank researcher Zhang Yansheng.

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.

Some Chinese cities are suffering from financial difficulties due to debt and deflation, leading to the implementation of bizarre fines and budget cuts to generate revenue, as the nation faces the risk of an economic "lost decade."