At least that is what the Business Insider is saying. From the article:
Conditions in the Chinese economy are worse than the world thinks, a self-exiled property entrepreneur told The New York Times.
According to Desmond Shum — once at the head of a multibillion-dollar development firm that he left in 2015 upon tighter control by Beijing — sales across industries, even those thought to be insulated from any slowdown, are falling, and the economic outlook among Chinese consumers is so dire that executives are reporting blatant acts of theft by employees.
"Several things have shocked me in conversations I've had with businesspeople in China," he said. "A big dairy company is producing more milk powder because people are cutting back on buying milk. Normally this is one of the last things you would cut out."
Shum's description of conditions on the ground in China provide an inside look at stagnating growth, as the country's post-pandemic recovery has fizzled dramatically since the first quarter.
Recent data shows that the Chinese producer price index dropped by the fastest rate in seven years last month, while consumer prices now linger at the edge of deflation for the first time since 2021.
The sputtering economy has also become evident in growing joblessness among the country's youth, where over 20% of 16-24 year olds were unemployed in May. Meanwhile, debt burdens continue to weigh on the property market, further straining new economic growth.
Again, I think this is overblown. China is likely to be more stable than the United States.
ReplyDeleteChina is in a similar position as Japan found itself in 1989: a collapse in real estate prices, aging population, and rapidly moving from being, overall, a low cost manufacturer to a medium to high cost manufacturer.
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