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…
Tag: Global economy
In previous downturns the world turned to China as an engine of growth – this time that driver may not be there
When Australia’s central bank released its quarterly economic update last week, China’s “uncertain” economic outlook topped a list of domestic worries for Australia. The International Monetary Fund too singled out China in its latest world economic outlook as among the “downside” tilts to its balance of risks. The recovery of the world’s second-biggest economy from the Covid pandemic was faltering, “with cross-border spillovers” likely if it slowed, the IMF said. Wednesday brought further confirmation of China’s disappointing performance as the economy slipped into deflation for the first time since late…
Economic ‘headwinds’ lead IEA to cut global oil demand forecast
Global oil demand will reach an all-time high this year, but “persistent macroeconomic headwinds” mean it will not grow as quickly as had previously been expected, the International Energy Agency (IEA) has said. The Paris-based global energy watchdog said that demand was expected to rise by 2.2m barrels a day in 2023, leading to an average of 102.1m barrels a day. But that prediction is 220,000 barrels a day lower than its previous expectations – the first time the agency has lowered its forecast for growth this year. China, boosted…
Sunak to urge G7 support for collective action against ‘economic coercion’
The UK and other G7 countries are planning collective action against Russia and China if they threaten trade boycotts for political reasons, announcing a new body to deal with “economic coercion”. Rishi Sunak will urge “bold and pragmatic collective action” against hostile states that stop trading with other countries when they disagree with their geopolitical decisions. He will cite Russia’s stranglehold on European gas supplies last year as a situation that could have been met with a collective response. Other examples include China’s punitive tariffs on Australian wine after Canberra…
The US-China relationship is still moving slowly towards a collision
I recently attended the China Development Forum (CDF) in Beijing, an annual gathering of senior foreign business leaders, academics, former policymakers, and top Chinese officials. This year’s conference was the first to be held in person since 2019, and it offered western observers the opportunity to meet China’s new senior leadership, including new premier Li Qiang. The event also offered Li his first opportunity to engage with foreign representatives since taking office. While much has been said about the Chinese president, Xi Jinping, appointing close loyalists to crucial positions within…
How war in Taiwan could mean the wheels come off the UK economy
As the world struggles with the economic fallout from the Ukraine war, fears are mounting about a conflict that would be even more consequential: a Chinese invasion of Taiwan. Last week, Taiwan’s foreign minister said he was preparing for the possibility of a conflict with China in 2027, and a leaked memo from a four-star US general said his “gut” told him the US – which is committed to defending Taiwan – would be at war with China in 2025. The UK foreign secretary warned last week that such a…
If China invaded Taiwan it would destroy world trade, says James Cleverly
A Chinese invasion of Taiwan would destroy world trade, and distance would offer no protection to the inevitable catastrophic blow to the global economy, the UK’s foreign secretary, James Cleverly, warned in a set piece speech on Britain’s relations with Beijing. In remarks that differ from French president Emmanuel Macron’s attempts to distance Europe from any potential US involvement in a future conflict over Taiwan, and which firmly support continued if guarded engagement with Beijing, Cleverly said “no country could shield itself from the repercussions of a war in Taiwan”.…
The Guardian view on the world economy: another bleak era beckons | Editorial
Remember the roaring 20s? Even as Covid gripped the world, optimists piped up that the economy would come roaring out of the pandemic, bolstering incomes and kickstarting an almighty boom. Harking back to the Spanish flu pandemic of a century earlier, they saw a decade of glorious growth ahead. Well, they were wrong. Ahead lies not roaring but snoring; no boom, but ever-deepening gloom. That is the message from the International Monetary Fund and the World Bank, which are holding their spring meetings in Washington DC this week. In its…
Pakistan’s fresh £580m loan from China intensifies debt burden fears
China has agreed to loan Pakistan $700m (£580m) to help it weather its worst economic crisis in a generation, in a move that will intensify concern among western countries about cash-strapped Islamabad’s debt burden to Beijing. The loan comes on top of $30bn (£25bn) that Pakistan already owes China and Chinese commercial banks. Securing the financing will help to unlock bailout cash from the International Monetary Fund (IMF). The news of the loan from the state-owned China Development Bank came the day after Pakistan’s National Assembly unanimously passed a money…
China’s future to AI and jobs: five big questions from Davos
A number of big themes emerged from the World Economic Forum in the Swiss resort Davos. Here are five of most pressing questions that came to dominate this year’s gathering of the global elite. Will China be forced to make friends with the west? Donald Trump’s trade war with China – continued by his successor Joe Biden – has left relations between east and west at rock bottom. But with Covid and trade tensions halving Chinese growth last year to just 3% and western businesses such as Apple moving business…