1/10/2024 0 Comments Zero time dilemma rose puzzleThe latest Politburo meeting from July showed that government officials were doubling down on the same strategy, committing to zero-covid for the foreseeable future. LP: You would think after the Shanghai lockdown and after these most recent lockdowns that there would start to be some consideration of shifting toward a new strategy in China. TN: Has there been any evidence that in looking at the economic price that they’re paying, the Chinese have any appetite for loosening up on that policy, and easing up because of the economic pain? So you can imagine that would have a lot of people questioning whether they should take another trip in the future, and that leaves a lot of people hesitant to spend, and just worried about the shape of the economy. Tens of thousands of travelers weren’t able to return home. In late July Wuhan, the city that was locked down at the very beginning of covid, had another one million people stuck at home and then just last week, vacation hot spot Sanya on Hainan - a beautiful spot in southern China - also went to a snap lockdown. And that’s all because these lockdowns are continuing. And businesses are equally hesitant to invest in the future. Most people are saving their money instead of spending it at shops and restaurants. Twenty percent of young job seekers in the cities aren’t able to find a job.Īll this reflects that people are just shaken up by these lockdowns. Factory production, investment, consumer spending - all fell for the prior month.Īnd one striking statistic is that urban youth unemployment is also way up – in the latest data from July, that number rose to 20 percent. So that’s a far cry from the five-and-a-half percent target that the government set out at the beginning of the year.Īnd the latest numbers from July show that things are not turning around. The latest numbers showed that in the second quarter, China’s GDP only grew by 0.4 percent. And that’s tied into this ongoing zero-covid problem, where Chinese cities have been going into snap lockdowns. The GDP growth for this year is far lower than expected. Lili Pike: I’ll give a quick snapshot of what the latest numbers show. Tom Nagorski: Lili Pike, to just frame and set the table for us: What are the data showing us about the current slowdown in China? Their conversation has been edited for length and clarity. That’s not just a current problem - it could pose all kinds of long-term challenges for China if the decline cannot be slowed. ![]() As one Bloomberg analysis put it this week, the “data for July suggest confidence is collapsing among China’s businesses and households.” 2022 will also be remembered as the year that China hit a dubious demographic milestone: Its population has begun to shrink. There are warning signs on multiple fronts - from covid-related shutdowns to falling housing prices, from rising income inequality to a dearth of jobs for university graduates - and the government is almost certain to miss its target of 5.5 percent GDP for 2022. ![]() as the world’s largest economy.īut while China remains an economic juggernaut, it’s also facing a whole lot of economic trouble at the moment. For several years, forecasters have debated not whether, but when the country will overtake the U.S. Over the past several decades the economic portrait of China has evolved - in historically rapid fashion - from slow-growing poor nation to fast-rising global economic power.
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