New China Era

[k1976]

What new norm of slower Chinese growth could mean for the global economy​

PUBLISHED TUE, JUL 25 20231:24 AM EDTUPDATED 5 HOURS AGO
Elliot Smith@ELLIOTSMITHCNBC
WATCH LIVE
KEY POINTS

• The Chinese government is ramping up a host of measures aimed at boosting the economy, with a key Politburo meeting scheduled later this week to review the country’s first-half performance.
• The most immediate spillover of a Chinese slowdown will likely come in commodities and the industrial cycle, said Rory Green, chief China economist at TS Lombard.
• Beyond the immediate loss of demand for commodities, Green said China’s recalibration of its key sectors drivers will also have “second order impacts” for the global economy.

 

[k1976]

The Chinese economy could be facing a prolonged period of lower growth, a prospect which may have global ramifications after 45 years of rapid expansion and globalization.

The Chinese government is ramping up a host of measures aimed at boosting the economy, with leaders on Monday pledging to “adjust and optimize policies in a timely manner” for its beleaguered property sector, while pushing stable employment towards a strategic goal. The Politburo also announced pledges to boost domestic consumption demand and resolve local debt risks.

 

[k1976]

Chinese gross domestic product grew by 6.3% year-on-year in the second quarter, Beijing announced Monday, below market expectations for a 7.3% expansion after the world’s second-largest economy emerged from strict Covid-19 lockdown measures.

On a quarterly basis, economic output grew by 0.8%, slower than the 2.2% quarterly increase recorded in the first three months of the year. Meanwhile, youth unemployment hit a record high 21.3% in June. On a slightly more positive note, the pace of industrial production growth accelerated from 3.5% year-on-year in May to 4.4% in June, comfortably surpassing expectations.

 

[k1976]

The ruling Chinese Communist Party has set a growth target of 5% for 2023, lower than usual and notably modest for a country that has averaged 9% annual GDP growth since opening up its economy in 1978.

Over the past few weeks, authorities announced a series of pledges targeted at specific sectors or designed to reassure private and foreign investors of a more favorable investment environment on the horizon.

 

[k1976]

https://www.cnbc.com/2023/07/25/wha...growth-could-mean-for-the-global-economy.html