China’s Economy Is Showing Signs of Slowdown

China's Economy Is Showing Signs of Slowdown

China’s Weak Spot Exposed: Country Flounders Under Economic Pressures

(TruthandLiberty.com) – China has the second largest economy in the world, behind the United States. Some economists believed it might overtake the US, although new data suggests a significant slowing. Reuters reported the Chinese economy struggled immensely in the first half of 2022. How will it impact the US, which is now in a recession after two straight quarters of negative economic growth?

There doesn’t appear to be a single issue holding the world’s largest population back. Yet, Beijing’s zero-COVID policy might be a leading contributor. The country is experiencing slowing manufacturing, high unemployment, and a severely struggling real estate market. Long-term, it could further harm the US supply chain, continuing to contribute to 40-year inflation highs and a deepening recession.

What’s Hampering the Chinese System?

On Friday, July 29, data from the National Bureau of Statistics reported the Chinese economy is at its worst point since the pandemic struck two years ago. Growth was an anemic 0.4% for the second consecutive quarter. In a separate Reuters report, President Xi Jinping said the ongoing lockdowns were the right strategy. He added the government would continue the Zero-tolerance COVID-19 lockdowns as needed to contain the virus. He said the country would accept temporary economic setbacks over allowing people to suffer.

The Asian country led all major economies during the rebound just a year ago. Now, some people wonder if the ripples are temporary.

Last month, Reuters shared a private poll from Caixin showing production had grown slower than economists predicted. In June, it surged after the communist lifted widespread COVID-19 lockdowns across several major cities. The news followed a report on Sunday, July 31, which reflected manufacturing contracted in July.

Retail consumption is also in serious trouble, along with real estate, which is limping through a mortgage revolt. If property sales continue to decline, the effects could hamper government finances which rely on land sales taxes.

The job market is also limping along over uncertainty in the marketplace. As company sales declined, businesses began cutting costs by letting go of workers. In January, the unemployment rate was 5.5%. In April, it exploded to 6.1%. The latest figures for June show it fell back to 5.5%, but it’s unclear whether the number will decline more or bounce back. Government officials say they are targeting 5.5% as a solid number.

What Does It Mean for the US?

Any manufacturing slowdown in China is bound to impact supply chains and the US financial system. In June, cargo ships entering the US from the massive country were down 30% over a year ago. As their economy slows due to internal realities, it may influence inflation and store shelves for consumers in the states.

Will factors in China deepen the recession in America?

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