{"id":134256,"date":"2023-09-06T05:39:27","date_gmt":"2023-09-06T05:39:27","guid":{"rendered":"https:\/\/fin2me.com\/?p=134256"},"modified":"2023-09-06T05:39:27","modified_gmt":"2023-09-06T05:39:27","slug":"chinas-economy-is-weakening","status":"publish","type":"post","link":"https:\/\/fin2me.com\/business\/chinas-economy-is-weakening\/","title":{"rendered":"China’s Economy Is Weakening!"},"content":{"rendered":"
Unemployment has been rising among the young, with authorities suspending data disclosures after youth unemployment crossed 20 per cent.<\/strong><\/p>\n China’s economic recovery is weakening.<\/p>\n The latest numbers suggest sequential gross domestic product (GDP) growth of 0.8 per cent, though year-on-year numbers are better because of the base effect.<\/p>\n Annual growth rates have slowed down from over 9 per cent on average between 2000 and 2019 to around 3 per cent in 2022 (chart 1).<\/p>\n <\/p>\n The country has previously depended on debt-fuelled infrastructure spending to power growth.<\/p>\n Indebtedness weighs heavier when growth slows down.<\/p>\n China’s general government gross debt is expected to cross 90 per cent of GDP in 2025 and 100 per cent in 2027, according to International Monetary Fund projections (chart 2).<\/p>\n <\/p>\n Part of the current troubles are related to the real estate sector.<\/p>\n Two major players, Country Garden and Evergrande, have struggled with repaying debt.<\/p>\n Troubles in the real estate sector can have a significant impact on the economy, as it accounts for nearly a quarter of GDP (chart 3).<\/p>\n <\/p>\n Larger structural worries also haunt China.<\/p>\n An ageing population that is growing slower than before is a headwind (chart 4).<\/p>\n <\/p>\n Unemployment has been rising among the young, with authorities suspending data disclosures after youth unemployment crossed 20 per cent (chart 5).<\/p>\n <\/p>\n All of this echoes what happened in its eastern neighbour earlier. Japan had a period of high growth followed by decades of low growth and deflation.<\/p>\n China’s consumer prices for July contracted by 0.3 per cent.<\/p>\n Similar levels have been seen around 2000, and in 2009 in the aftermath of the global financial crisis.<\/p>\n India is now more closely linked to China than either of those periods.<\/p>\n China’s share in India’s trade was around 2 per cent in the early 2000s, and 9 per cent around the global financial crisis.<\/p>\n It has averaged 11 per cent over the last five years (chart 6).<\/p>\n <\/p>\n Feature Presentation: Ashish Narsale\/Rediff.com<\/em><\/strong><\/p>\n