Tag: Chinese economy

How China Made Its Housing Crisis Worse

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In China the pension akin to Social Security in the United States pays about $410 a month to seniors who live in cities, and only $25 a month in the countryside. Public health care covers less than half of people’s costs. Unemployment insurance provides around $220 a month; the U.S. average is nearly $1,700. China’s consumer safety net is full of holes, even when accounting for lower costs of living compared to the United States. As growth has faltered in recent years, and now as a simmering real estate crisis…

China’s economic model is faltering – does it have the political will to fix it? | George Magnus

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The long days of summer are proving to be rather too long for the government in Beijing. In an attempt to stabilise the faltering real estate market, the authorities announced earlier this week a modest decline in interest rates that was underwhelming in scale and intent. Those who recall the bad old days in which the west was buffeted by successive crises such as those involving Northern Rock, Bear Stearns and Lehman Brothers will recognise the futility of lower interest rates in stemming systemic problems in real estate and finance…

China’s Property Crisis: Why It’s So Hard for Beijing to Fix

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China’s stock market was plunging and its currency was teetering. The head of the central bank, fielding questions at a rare news conference, said that China would make it easier to get home mortgages. It was February 2016 and Zhou Xiaochuan, the central bank’s longtime governor at the time, announced what proved to be the start of an extraordinary blitz of lending by China’s immense banking system. Minimum down payments for buying apartments were reduced, triggering a surge in construction. Vast sums were also lent to local governments, allowing them…

The Guardian view on the Chinese economy: it looks bad. What we can’t see may be worse | Editorial

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A spate of recent statistics shows that the Chinese economy is faring poorly. The country was supposed to rebound after ditching its draconian “zero Covid” policies, but, after an initial revival, things have gone awry. Earlier this month it slipped into deflation. Key indicators, including industrial production, investment and retail sales, came in well below expectations. The most concerning figure, however, is the one that we can’t see. The youth unemployment rate was suspended from the monthly economic data release, having reached a record 21.3% in June – suggesting not…

Chinese economic slowdown is a result of debt supercycle | Kenneth Rogoff

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The 2008 financial crisis in the US kicked off a debt supercycle, which spread to Europe in 2010 and has recently engulfed many of the world’s low-income and lower-middle-income countries. Could the debt woes of Country Garden, the behemoth Chinese real estate developer now facing billions of dollars in losses, augur the cycle’s next turn? The answer remains unclear. While the Chinese authorities have a remarkable track record when it comes to containing economic crises, the challenges posed by a significant growth slowdown, combined with high debt levels – especially…

Chinese Confidence Hits Low Point Because of Nation’s Economic Troubles

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When their government abruptly ended its harsh Covid measures in December, many Chinese expected a robust rebound from pent-up demand. Eight months later, China is instead facing an accumulation of bad news: record youth unemployment, a deep housing slump, stagnant spending, even deflation. That’s a shock to many Chinese who are used to an economy that kept on expanding and living standards that rose with it. Now they’re contending with slowing businesses and shrinking personal fortunes. I talked to over a dozen business owners and consumers, as I have been…

China cuts key interest rate amid economic slowdown

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China’s central bank has cut one of its key lending rates but left another unchanged, surprising economists who had expected more forceful action to support economic growth amid widespread concerns over its path. The world’s second-largest economy is in the midst of a slowdown, and has slipped into deflation with prices falling year on year as slowing domestic spending weighs on the country’s post-Covid economic recovery. The Chinese property industry is also in crisis, as the slowdown exposes overextended developers. Evergrande Group, once China’s leading property developer, filed for bankruptcy…

China is too big for a Soviet Union-style collapse, but it’s on shaky ground

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China’s economy is going through a rough patch. Growth is slowing and its property bubble has well and truly burst. Unemployment is rising. So what, you might say? Every country has difficult periods when past excesses catch up with it. Eventually the economic cycle turns and recovery begins. China is the world’s second biggest economy and has grown at a stupendous pace over the past four decades. It plays a pivotal role in the global economy and has invested heavily in advanced manufacturing and AI. Sure, it has problems but…

China’s property crisis deepens as developer Country Garden at risk of default

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China’s property crisis deepened as two major developers faced severe financial difficulties that threaten to send shock waves through the country’s economy and beyond. Evergrande, the poster child for the woes of China’s property sector, filed for chapter 15 bankruptcy protection in New York on Thursday. The provision permits the company to protect its US assets and will allow cross-border bankruptcy proceedings as it undergoes a restructuring. The filing from Evergrande, which defaulted in 2021 after a liquidity crisis, came a day after China’s securities regulator notified the company’s Chinese…

How Geopolitics Is Complicating the Move to Clean Energy

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He is known as the Minister for Everything. From the government offices of Indonesia’s capital to dusty mines on remote islands, Luhut Binsar Pandjaitan commands authority as the nation’s essential power broker. A four-star general turned business magnate turned cabinet officer, Mr. Luhut’s paramount aspiration is transforming Indonesia into a hub for the production of electric vehicles. But as he pursues that goal, he and his country are increasingly vulnerable to geopolitical forces beyond their control. Though this archipelago nation has long sidestepped entanglements in ideological rivalries, it is increasingly…