![]() ![]() opportunity.Īnd while this may be somewhat premature, the Middle Kingdom has some serious structural issues to contend with, many of them of their own making. What’s Next?įoreign Affairs recently published an article with the provocative title “The End of China’s Economic Miracle,” arguing that China’s troubles could be a U.S. This was the lowest reading since late-2009, and less than half of the ¥780 billion economists had forecast. New bank loans fell to ¥346 billion in July, down from ¥3.05 trillion in the month before. ![]() New LoansĪdding to the dismal economic mood, people borrowed less money according to the most recent figures provided by the government. At the same time, the spread between the fixed exchange rate set by the People’s Bank of China and the offshore rate, rose to more than 1,000 basis points. In an effort to stabilize the currency, major state-owned Chinese banks were seen buying up yuan in offshore money markets. Given the stream of economic bad news, it’s no surprise that the yuan fell to a 16-year low against the U.S. In July, the urban youth unemployment rate reached 21.3%, the highest ever recorded in the country, leading the National Bureau of Statistics of China to suspend future releases. Youth UnemploymentĪnd while the headline unemployment rate remained steady at 5.3% in August 2023, up slightly from 5.2% the month before, it papers over serious weakness for urban youth, aged 16 to 24. The decline was led by Household Articles and Services, Food & Tobacco, and Transportation and Communications.Īt the same time, the prices that producers paid for industrial products (PPI) fell 4.4% (year-over-year), the tenth month in a row with a negative reading. The consumer price index moved into deflationary territory for the first time since 2021, with prices falling 3% year-over-year. There was one bright spot, however: exports to sanction-burdened Russia increased 51.8%, but that wasn’t nearly enough to offset the overall downward trend. On a regional basis, exports fell year-over-year to China’s three biggest customers, ASEAN, the EU, and the U.S., by 17.4%, 15.1%, and 20.8% respectively. ![]() Meanwhile, imports fell 12.4%, reflecting the cautious consumer mood. ExportsĮxports fell by 14.5% in July, marking the third straight month of declines, and hitting lows not seen since February 2020. On an annual basis, China’s GDP expanded 6.3% year-over-year, below the forecasted 7.3% rate. This follows a more robust 2.2% figure in Q1, which was driven by pent-up demand released by the end of COVID-era lockdowns. However, growth seems to have slowed to a crawl, down to 0.8% (quarter-to-quarter) in the second quarter of 2023 driven by weakness in the Tertiary Sector, which includes retail spending and the troubled real estate sector. GDPĬhina’s annual GDP growth rate has averaged 9% since 1978, when the country opened itself up to the global market under Deng Xiaoping. Six Red Flag Indicators on China’s Economy 1. Data comes from the National Bureau of Statistics of China, the People’s Bank of China, and the General Administration of Customs, to see what is flashing red. In this visualization, we look at six important indicators that point to China’s economy slowing down. The past several months have seen an avalanche of bad economic news for China, putting the country’s post-pandemic recovery, and global economic growth, in jeopardy. The People’s Republic of China is the world’s second-largest economy, responsible for one quarter of global GDP growth this millennium-so when the country catches a cold, the world notices. Six Red Flags Pointing to China’s Economy Slowing Down Offsetting revenue collected but not attributed to functions Here’s a look at the full breakdown, and where spending was allocated last year: U.S. This was the second highest deficit on record, down from a peak of $3.1 trillion in 2020 during the height of the global pandemic.Īfter income and Social Security spending, health was the third-largest expenditure in 2021. federal spending was higher in 2021, which put the federal government in a budget deficit of $2.7 trillion. ![]() Despite the trillions in revenue generated, like most years, U.S. ![]()
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