The Instability of the Chinese Economy: A Wobbly Giant?
China, the Asian giant, has long been the pillar and engine of global economic growth. However Recent reports indicate that this superpower may be facing a of the most severe crises of recent decades.
According to CNN reports, the country's economic growth is stagnating and prices have begun to fall. This situation has caused Global alarm, as the Chinese economy represents a fundamental engine in the Supply chain and global trade.
China, which has traditionally maintained enviable growth figures, It is struggling to reach its 5.5% growth target by 2023. The predictions are not encouraging, suggesting that even 5% can prove unattainable, marking a significant setback for the administration by Xi Jinping.
With the bankruptcy of the real estate giant Evergrande, the Chinese economy is also collapsing!
— NFSC_HAGnews (@NFSC_HAGnews) August 31, 2023
McCarthy:" if the Chinese Communist Party cannot rectify the real estate market, it will be a one-way train for the CCP to go through a difficult time for the economy!" pic.twitter.com/bbYL8ZPKa5
Once considered the bulwark of the Chinese economy, the sector Real estate is going through times of uncertainty. Rumors about The inability of some companies to pay off their debts has shaken the confidence in this sector, previously seen as a safe haven for investments.
Foreign trade, one of China's traditional strengths, also shows signs of deterioration. According to Le Monde, Chinese exports suffered a 14.5% drop in July.
A particularly worrying problem is unemployment among young people Chinese. The gravity of the situation has led the Beijing government to cease publishing related statistics. No However, it is known that the youth unemployment rate reached 21.3% in June 2023, according to the New York Times.
To aggravate the situation, the yuan, China's national currency, has devalued its lowest level in 16 years, further eroding confidence in the economy.
Gordon Gordon Chang: The Chinese economy is not only weakening, it's also failing..... pic.twitter.com/q5sWqIYMih
— NFSC_HAGnews (@NFSC_HAGnews) August 31, 2023
While comparisons to the 2008 financial crisis are inevitable, CNN notes that the current picture differs considerably. Does more In a decade, China responded with the largest economic stimulus package in the world. world, a situation that contrasts with the present reality.
Post-Covid Effect
Expectations were high after the removal of restrictions related to Covid-19 in China. However, the economic boost that It was expected not to materialize as anticipated.
Le Monde, in its analysis, considers that the current Chinese crisis might not be A 2008-style catastrophe, but rather a prolonged stagnation similar to what Japan experienced in the 1990s.
China is undoubtedly facing one of the biggest challenges in its history contemporary. As Le Monde points out, this moment could be the biggest challenge for Xi Jinping and his administration. The repercussions of this crisis will not only be felt in China, but in the global economy, given the interconnectedness of the world current.
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