The rise of China has been the biggest story in the global economy in recent decades. But amid concern about its stumbling property market and global fears about inflation, the emergence of its neighbour, India, as a potential new economic superpower may be going under the radar. You won’t find mention of it in Liz Truss’s blueprint for a “modern brilliant Britain”, but the UK has just been overtaken by India as the world’s fifth biggest economy. The nation of 1.4 billion people is on track to move into third…
Tag: Economics
Huawei founder sparks alarm in China with warning of ‘painful’ next decade
The founder of Huawei has delivered a stark warning for the tech company’s future, sparking alarm with the frankness of his assessment and what it signals for smaller businesses amid China’s economic troubles and a global downturn. In a leaked internal memo, Ren Zhengfei told Huawei staff “the chill will be felt by everyone” and the company must focus on profit over cashflow and expansion if it is to survive the next three years, indicating further job cuts and divestments. “The next decade will be a very painful historical period,…
China’s property market is in freefall. What does this mean for the world economy? | Keyu Jin
The property sector in the Chinese economy has always been something of a puzzle. At its peak, it accounted for a quarter of the nation’s economic output, broadly measured. And it sees people in Beijing and Shanghai paying house prices similar to those in San Francisco and New York, despite having just a quarter the income of American buyers. Now many believe that we are about to see a violent contraction of the property market in China. The government wants to intervene to curb speculation, and rein in what it…
Growing pains: China’s faltering economy tests leadership’s nerve
On his tour of the southern Chinese city of Shenzhen last week, Li Keqiang, the premier, tried to send some positive energy at a time many citizens have been complaining of economic hardship. “China’s opening will continue. The Yellow river and the Yangtze river will not flow backward,” Li said, striking an upbeat tone while visiting Yantian Port, a gateway to Europe and North America, two of China’s biggest markets. “The waters of Yantian Port will also flow incessantly, and not only will continue to maintain your advantages, but also…
Oil prices hit lowest level since Ukraine invasion on China growth fears
Global oil prices have dropped amid concerns over weaker growth in the Chinese economy caused by repeated Covid lockdowns and a downturn in the property sector. A barrel of Brent crude fell by about 5% to below $94 (£78) on Monday, hitting the joint lowest levels since the Russian invasion of Ukraine as traders reacted to weaker figures from the world’s second-largest economy. China’s central bank unexpectedly cut interest rates on its key lending facilities for the second time this year after disappointing official growth figures. Factory output in the…
China’s export sector posts stronger than expected figures for July
China’s export industries performed strongly last month after spending the first half of the year hampered by shortages of raw materials and pandemic-related lockdowns at major ports. Offering an encouraging boost to the economy, outbound shipments grew 18% in July from a year earlier, the fastest pace this year, official customs data showed on Sunday, beating analysts’ expectations for a 15% gain, though imports remained sluggish. Analysts had expected exports to fade amid growing signs that Europe, the US, UK and Australia are heading for recession, dampening the outlook for…
China funnels its overseas aid money into political leaders’ home provinces
China’s financing of overseas projects has disproportionately benefited the core political supporters of incumbent presidents or prime ministers of those countries that receive the funds, according to a new book. During the 20th century, China was mostly known as a recipient of international development finance. Its overseas development programme was modest – roughly on a par with that of Denmark. But over the course of one generation, as Beijing emerged as the world’s second-largest economy, its footprint began to extend far beyond its borders – often in the form of…
‘Do whatever it takes’: Beijing urged to act as China’s economy falters
At a recent online gathering of top Chinese economists, a palpable sense of urgency filled the virtual meeting room. In recent weeks, a slew of reports by Chinese and foreign economists pointed to a deteriorating economy. Outside the country, talk of China being the engine of global economic growth no longer convinces. During the meeting Huang Yiping, a Peking University professor and a former central bank adviser, urged Beijing to “do whatever it takes to save the economy”. Huang was paraphrasing a line from the height of the European debt…
Europe’s growth forecast cut as Ukraine war drives up inflation; diesel price hits record – as it happened
Closing summary Time for a recap Concerns over the global economic recovery have continued to mount, after China’s economic activity plummeted, and eurozone growth forecasts were cut. China’s retail sales tumbled by over 11% in April, while industrial production contracted by 2.9% — both the worst readings since the early months of the pandemic in 2020. Unemployment rose, while property sales saw their biggest slump since August 2006. Analysts warned that China’s economy could shrink this quarter, as Covid-19 lockdowns continued to hit consumer spending and factory output. The EC…
China’s struggle delights some – but should make us all nervous | Larry Elliott
China has been central to the story of globalisation over the past 30 years but now it is struggling. More than two years after Covid-19 cases were discovered in Wuhan, the world’s most populous country has yet to get on top of the virus. Draconian lockdowns have been imposed because China’s vaccines are less effective than those available in the west, and immunity levels are lower as well. Growth is slowing and not just because of the tough restrictions insisted upon by President Xi Jinping. Flaws in China’s economic model…