20.1 C
Athens
Σάββατο, 23 Νοεμβρίου, 2024

Latest data shows downward spiral in China’s economy

Περισσότερα Νέα

- Advertisement -

With worsening economic imbalances, China’s economy continues to lose momentum. China’s retail sales in June fell to 3.1 per cent from a 12.7 per cent increase in May, according to the National Bureau of Statistics (NBS) report, Khabar Hub reported. Disappointing June data, including low retail sales, falling export orders and slow industrial production indicate stalled economic recovery the report from the Nepal digital news outlet said.

Though industrial output growth quickened to 4.4 per cent in June from 3.5 per cent in May, the demand remained tepid. Even though investment by state-owned enterprises grew by 8.1 per cent in the first six months of 2023, private fixed-asset investment shrank by 0.2 per cent, indicating weak private business confidence, Khabar Hub reported. China’s exports fell by 12.4 per cent in June, the highest drop in three years, while imports fell by 6.8 per cent.

China’s foreign trade is likely to face more headwinds in the second half of the year, due to high inflation in developed countries and geopolitical situation. Foreign Direct Investment (FDI) inflows also dropped by 5.6 per cent in the first five months of the year, Khabar Hub reported.

The perception that “doing business in China has become much riskier” is choking the flow of capital into the country. Xi Jinping’s policy to rebalance the economy away from debt-driven investment towards domestic consumption has not been successful due to the inability of the leadership to expand social welfare and health care provisions, leading to high levels of precautionary savings.

China’s equity market has been underperforming compared to other global markets this year, suggesting that weak growth prospects and lack of policy stimulus have already been fully priced, Khabar Hub reported. Chinese stocks have fallen more than 20 per cent from their peak in late January.

- Advertisement -

China’s IPO applications slumped by a third in the first half of 2023, as volatility in earnings, a slowing economy and tighter regulatory scrutiny deterred companies. The zero rate of inflation in June and falling factory-gate prices have fueled concerns about the risk of deflation, Khabar Hub reported.

Domestic travel spending during the June holiday this year for the dragon-boat festival was lower than pre-pandemic levels. Car sales and residential real estate sales declined despite the traditionally busy season.

Expansion in the services industry has slowed as well. The revenue of the service sector, which is dominated by small, midsized and individual businesses, has fallen substantially. This has made this sector cautious about hiring and expansion since the removal of zero-Covid restrictions, Khabar Hub reported.

If the economy continues to lose momentum in the long term, the unemployment problem is likely to get more serious, which would challenge the social stability in the country. Xi Jinping’s emphasis on state-owned enterprises at the expense of the private sector is unlikely to revitalise economic growth as the productivity of these corporations is much lower than that of private firms in China.

Xi Jinping’s policy to rebalance the economy away from debt-driven investment towards domestic consumption has not been successful due to the inability of the leadership to expand social welfare and health care provisions, leading to high levels of precautionary savings. Due to the pessimism among the population regarding the state of the economy, domestic consumption has remained weak.

Local governments are themselves under financing pressure. They had come to rely on land sales for revenue, but that source of revenue is also drying up due to the housing downturn, Khabar Hub reported.

The Chinese economy is likely to face an extended period of weak growth due to the loss of demographic dividend, pushing away from capital-intensive growth, and a gradual deceleration in productivity growth. The government’s ‘Common Prosperity’ policy and efforts to increase consumption are not backed by structural economic reforms, which have been stalled due to the high total debt of the country, estimated at around 350 per cent of GDP, Khabar Hub reported.

It is becoming more difficult for the Xi Jinping-led government to find a solution to the slowing economy. 

- Advertisement -

ΑΠΑΝΤΗΣΤΕ

εισάγετε το σχόλιό σας!
παρακαλώ εισάγετε το όνομά σας εδώ

The reCAPTCHA verification period has expired. Please reload the page.

Ροή ειδήσεων

ΣΧΕΤΙΚΑ ΑΡΘΡΑ

Fatwa against VPNs: A threat to digital freedom in Pakistan

In a rapidly evolving digital world, where technology is increasingly integrated into every aspect of our lives, the internet is often viewed as a...

Strikes and protests increase in China due to unpaid wages and factory closures

Strikes and protests by labourers and industry workers have seen arise in China where such incidences are strictly forbidden. The majority of the protests...

Pakistan: HRCP demands reversal of Anti-Terrorism Act amendment proposal, warns of threats to democracy

The Human Rights Commission of Pakistan (HRCP) concluded its 38th Annual General Meeting with a stern call for urgent action to address Pakistan’s worsening...

China’s space ambitions face ‘huge test’ from Musk presence in Trump White House

Tech mogul Elon Musk's potential weight in the second Donald Trump administration is likely to accelerate the US space programme and pose a "huge test" to China's extraterrestrial...

ΔΗΜΟΦΙΛΗ ΑΡΘΡΑ

Φέτβα κατά των VPN: Μια απειλή για την ψηφιακή ελευθερία στο Πακιστάν

Σε έναν ταχέως εξελισσόμενο ψηφιακό κόσμο, όπου η τεχνολογία ενσωματώνεται ολοένα και περισσότερο σε κάθε πτυχή της ζωής μας, το Διαδίκτυο θεωρείται συχνά ως...

Fatwa against VPNs: A threat to digital freedom in Pakistan

In a rapidly evolving digital world, where technology is increasingly integrated into every aspect of our lives, the internet is often viewed as a...

Σε κίνδυνο τα ανθρώπινα δικαιώματα στο Πακιστάν

Η Επιτροπή Ανθρωπίνων Δικαιωμάτων του Πακιστάν (HRCP) ολοκλήρωσε την 38η Ετήσια Γενική Συνέλευση με μια αυστηρή έκκληση για επείγουσα δράση για την αντιμετώπιση της...

Οι απεργίες και οι διαδηλώσεις αυξάνονται στην Κίνα λόγω των απλήρωτων μισθών και του κλεισίματος των εργοστασίων

Απεργίες και διαμαρτυρίες από εργάτες και εργάτες της βιομηχανίας έχουν εμφανιστεί στην Κίνα όπου τέτοια περιστατικά απαγορεύονται αυστηρά. Η πλειονότητα των διαμαρτυριών διεξήχθη πριν...