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 fiscal revenue growth slowed in the first seven months of 2023 due to signs of an economic slowdown, with fiscal revenue rising 11.5% compared to the previous year.
The US economy has exceeded the Federal Reserve's estimate of its growth potential in recent years, with growth averaging 3% under President Joe Biden, but concerns about rising public debt and inflation, as well as the Fed's efforts to control them, may lead to slower growth in the future and potentially a recession. However, there are hints of improving productivity that could support continued economic growth.
The U.S. economy has defied previous expectations of slow growth due to factors such as poor productivity and population aging, with growth exceeding projections and averaging 3% under President Joe Biden, but policymakers are still cautious and concerned about the uncertain economic trends, including labor force growth, inflation, and productivity.
Thailand's economy grew at a slower pace in the second quarter due to weak exports and slower investment, prompting the government to lower its 2023 growth forecast, while the central bank may not raise rates again amidst faltering economic recovery and low inflation.
Malaysia's economic growth in the second quarter of 2023 was the slowest in nearly two years due to sliding exports and a global slowdown, prompting the central bank to warn of lower full-year growth and the possibility of the target being hard to reach.
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 worrisome for global markets as it is one of the largest buyers of commodities.
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.
Canada's second-quarter GDP report is expected to show a significant slowdown in economic growth, potentially leading to a pause in interest rate hikes by the Bank of Canada despite recent high inflation data.
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.
The strong U.S. economic growth and potential rate hikes by the Federal Reserve could pose global risks, potentially leading to a significant tightening of global financial conditions and affecting emerging markets and the rest of the world.
A post-pandemic global economy characterized by record levels of government debt, geopolitical tensions, and weak productivity gains may lead to a slow-growth future that hinders development in some countries even before it begins, as discussed at a symposium organized by the Kansas City Federal Reserve.
The global economy is expected to slow down due to persistently high inflation, higher interest rates, China's slowing growth, and financial system stresses, according to Moody's Investors Service, although there may be pockets of resilience in markets like India and Indonesia.
Several developing nations, including Zambia, Sri Lanka, Ghana, Pakistan, Tunisia, Egypt, El Salvador, Kenya, Ukraine, and Lebanon, are struggling with significant debt problems, which will be a key topic of discussion at the G20 summit in Delhi next month.
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.
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.
Global business activity slowed further last month as services firms struggled with weak demand, potentially leading to a recession in the euro zone and a decline in the UK's private sector activity.
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.
Several international financial institutions have lowered their growth forecasts for China's economy below the government's target due to weak exports and a property crisis, posing a challenge despite Beijing's optimistic rhetoric.
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.
The global economy is slowing down, but India and other developing countries are experiencing strong growth, while the G7 countries and China are struggling; however, the growth in developing countries is being engineered under conservative fiscal conditions, making it more sustainable, in contrast to the debt-fueled growth in the West and China. China's economic model is facing challenges, as it needs to shift from an investment-based model to a consumption-based one, but it lacks the administrative capacity to provide necessary services to its citizens. The world economy is experiencing a redistribution of power, with rising middle powers playing major powers against each other to secure concessions. While the world economy slows down, there are signs of improvement for individuals, with real wages turning positive in Western countries and labor's bargaining power increasing.
The global economy is expected to be influenced by three key factors in the next five years, including increased labor bargaining power, potential conflicts between central banks and governments over borrowing costs, and the power struggle between the US and China, which will lead to higher risk-free rates and lower expected equity risk premiums for investors.
Despite concerns over the strong US economy and the slowdown in China, emerging markets may still see opportunities for growth due to factors such as a slow divorce from China, India's appeal as an alternative, South Korea's tech market, Mexico's trade links with the US, and the potential for rate cuts in developing economies.
Germany's deep economic troubles, including three consecutive quarters of negative growth, could have significant global implications, especially considering its role as the main driver of economic growth in the euro zone and its high exposure to the Chinese economy.
Germany is projected to be the most heavily impacted by the global economic slowdown due to higher interest rates and weaker global trade, according to the Organisation for Economic Co-operation and Development (OECD), with its economy likely to shrink this year alongside Argentina and experience a weaker 2024. The slowdown in China, inflationary pressures, and tightening monetary policy are among the factors affecting Germany's growth. The OECD also warned of persistent inflation pressures in various economies and called for central banks to maintain restrictive interest rates until underlying inflationary pressures subside.
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 OECD forecasts that a stronger U.S. economy will help offset the global slowdown this year, but a weakening Chinese economy will have a bigger impact next year.
The Organisation for Economic Cooperation and Development (OECD) has lowered its forecast for global economic growth in 2024 to 2.7%, while predicting inflation to remain above central bank targets despite interest rate hikes; fears of a slowdown in China and reduced growth in the US contribute to the pessimistic outlook.
Despite threats such as a government shutdown, the UAW strike, rising gas prices, and the resumption of student loan repayments, economists are mostly unconcerned about a potential economic slowdown, believing the economy to be internally robust but vulnerable to mistakes.
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