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's property market is seeing strong sales and rising rents, indicating a continuing demand for housing that pessimists are missing, according to veteran economist Hong Hao.
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.
Hong Kong stocks rebounded as traders considered the recent market slump to be excessive, with Chinese tech leaders such as Alibaba, AIA, and NetEase leading the way.
China's economic slowdown, marked by falling consumer prices, a deepening real estate crisis, and a slump in exports, has alarmed international leaders and investors, causing Hong Kong's Hang Seng Index to fall into a bear market and prompting major investment banks to downgrade their growth forecasts for China below 5%.
Consumer spending growth is slowing as the economy stabilizes, with consumers prioritizing essential purchases and adjusting their spending habits in response to rising interest rates and financial pressures.
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 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 debt-fueled property boom and faltering exports, coupled with defaults and bankruptcy filings by major companies, suggest that the Chinese economy may be heading towards a significant crisis.
China's economy is facing a number of challenges, including a property sector crisis, but experts believe it is unlikely to experience a "Lehman moment" like the US did in 2008 due to its state-owned financial system and government involvement in the economy. However, they do foresee a prolonged structural economic crisis.
Chinese stocks rebounded briefly after Beijing implemented measures to halt the slide, but foreign investors used the opportunity to unload $1.1 billion of mainland Chinese equities, reflecting ongoing nervousness about holding capital in China.
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's rebound from zero-covid restrictions has resulted in weak growth and deflation, with the lack of consumer spending becoming a major concern for policymakers.
High energy prices and strong economic growth could lead to a rebound in inflation, with prices likely hovering around 5%, according to a former White House economist.
China's economy is not as bad as perceived, with consumer spending picking up and indicating that growth is moving in the right direction, according to an official at the British Chamber of Commerce in China.
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.
Consumer spending in China rebounded in August, with all categories, including apparel, automotive, food, furniture, appliances, and luxury, experiencing increased sales compared to July, according to a survey by the China Beige Book. Retail sales in July rose by 2.5% year-on-year, raising concerns about China's economic growth, but the August survey showed a surge in spending, particularly in the services sector, which saw continued strength in travel and hospitality. Additionally, corporate borrowing increased as the cost of capital declined, indicating a boost in business activity. However, China's property sector continued to worsen, with house prices barely growing and home sales declining.
China's property sector is in crisis, with an 87% drop in the value of developers' dollar bonds and 53 companies collapsing, indicating the broader challenges faced by the nation's real-estate industry.
The slowdown in China's property market continues despite government measures to revive the economy, with analysts warning that the sentiment among many Chinese is too weak for these moves to be effective.
China's relief measures to support the property sector have spurred a home-buying spree in Beijing and Shanghai, with transaction volumes in both cities increasing significantly, indicating robust housing demand; however, concerns persist that this demand may not be sustained due to other restrictions and a faltering growth outlook.
China's stock market rebound may be temporary as corporate earnings continue to decline and companies revise down their outlooks, causing concern for foreign funds and prompting Bank of America to urge caution.
China is considering further easing measures in the property market and increasing fiscal support for infrastructure investment to boost economic growth in the fourth quarter, as sluggish demand remains a challenge.
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'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 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.
New home sales in Beijing have increased by 16.9% in the week of September 4-10, indicating that government efforts to revive the property sector are having an impact in the Chinese capital. However, the rebound in sales is not reflected across the rest of China, with sales falling 20% on average nationwide.
China's consumer prices returned to positive territory in August, increasing by 0.1% from a year earlier, while producer prices fell for the 11th consecutive month; analysts expect consumer prices to recover and services inflation to pick up as energy prices stabilize and the output gap narrows.
China's economy is expected to grow less than previously anticipated due to struggles in the property market, leading economists to predict further downgrades and posing risks to both the domestic and global economy.
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 recent policies to stabilize the property sector may not be enough to stimulate real economic growth, although they could generate demand, according to analysts.
The struggling real estate sector in China, due to a current crisis and government regulations, is impacting consumer spending and causing Chinese tourists to be slow in returning to international travel. As Chinese homeowners prioritize savings and cut back on spending, global tourism destinations are experiencing a decline in Chinese visitors, resulting in a forecasted decrease of nearly 70% in China's outbound travel spending this year.
China's currency, the yuan, has depreciated over 8% against the dollar as the Chinese economy grows less than expected, making it harder to reach its growth target of 5% for 2023, and worries about the economy have intensified due to issues in the real estate sector and financial health of local governments, causing concerns about the future of the yuan which may experience a slow but steady depreciation in the face of a weak dollar and a desire to maintain a trade surplus.
China's property sector continues to struggle with deepening falls in new home prices, property investment, and sales in August, despite recent support measures, adding pressure to the country's economy.
China's factory output and retail sales grew at a faster pace in August, but declining investment in the property sector poses a threat to the country's economic recovery.
Despite prevailing negativity regarding China's economy, alternative high-frequency data points, such as subway ridership and commodity prices, suggest that many parts of the economy are functioning well, although the real estate sector is still struggling.
Economic activity in China appears to improve in August as industrial production and retail sales show growth, however, the real estate sector continues to face challenges with property investment and sales declining, leading Moody's to downgrade its outlook for the sector.
Chinese economic data showing strength in consumer spending and manufacturing activity boosted Asian markets, with Hong Kong's Hang Seng Index rising 0.8% and Tokyo's Nikkei 225 surging 1.1%, despite concerns about a slowdown in China's economy.
China's economic data for August shows a mixed picture, with retail sales and production on the rise, property investment declining, and the urban jobless rate ticking downward, leading experts to believe that while there may be modest improvements in growth, a strong recovery is still unlikely.
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.