Post by account_disabled on Feb 27, 2024 1:06:40 GMT -5
Concerns about youth unemployment persist, and are not helped by the government's decision to suspend the publication of relevant data. The prospects for foreign trade and investment are equally problematic. There is growing awareness that economic and financial decoupling between China and the United States is likely to continue. This could reduce the contribution of exports to growth, disrupt the import of crucial industrial inputs, undermine foreign direct investment and make portfolio investors even more skittish. The will of the authorities is also in doubt. Careful analysis of the leaders' statements points to concerns that heavy reliance on traditional stimulus measures would jeopardize China's ability to escape the common development trap of being stuck at middle-income levels. This hurdle has already hampered many developing countries in their quest to join the ranks of advanced economies. A large stimulus would also increase the risk of corruption.
Economists and Wall Street analysts have been disappointed by China's economic performance and remain hopeful that this could prompt the government to undertake a stimulus effort similar to that seen in 2008. This, in turn, would Jordan Mobile Number List revitalize domestic growth and reestablish China as a key driver of global expansion. However, the most likely scenario is that growth will continue to be weak. The main policy question now is how quickly the government will move from stimulus measures to a faster fundamental review of its growth strategy. China's disappointing economic performance so far in 2023 can be attributed to two main factors: a lackluster recovery following the easing of strict Covid-0 restrictions and more persistent and structural growth challenges. The latter is the result of an economic strategy that has historically relied excessively on the real estate sector, high local debt, inefficient state-owned companies, low-end manufacturing and Internet platforms for national consumption.
This problem has been exacerbated by several factors, including regulatory overreach, current geopolitical tensions, and declining foreign direct investment inflows. There has also been concern about a possible Japanese-style deflationary trap, especially in light of falling consumer and producer prices. Some foreign investors have asked whether “China is investable.” In recent weeks, Chinese authorities have announced a series of small monetary, fiscal and regulatory measures to boost the economy and markets. Until now, these measures have been correctly perceived as piecemeal and lacking conviction. However, many still believe that they will eventually accumulate to a shocking critical mass. However, this view raises problems. China faces not only growth challenges but also significant financial problems, including pockets of high debt that could easily transform into systemic risks. This limits the reach of outdated stimuli. Heightened sensitivity surrounding the distressed housing sector, in particular, is making households more cautious in spending, further reducing an engine of growth.
Economists and Wall Street analysts have been disappointed by China's economic performance and remain hopeful that this could prompt the government to undertake a stimulus effort similar to that seen in 2008. This, in turn, would Jordan Mobile Number List revitalize domestic growth and reestablish China as a key driver of global expansion. However, the most likely scenario is that growth will continue to be weak. The main policy question now is how quickly the government will move from stimulus measures to a faster fundamental review of its growth strategy. China's disappointing economic performance so far in 2023 can be attributed to two main factors: a lackluster recovery following the easing of strict Covid-0 restrictions and more persistent and structural growth challenges. The latter is the result of an economic strategy that has historically relied excessively on the real estate sector, high local debt, inefficient state-owned companies, low-end manufacturing and Internet platforms for national consumption.
This problem has been exacerbated by several factors, including regulatory overreach, current geopolitical tensions, and declining foreign direct investment inflows. There has also been concern about a possible Japanese-style deflationary trap, especially in light of falling consumer and producer prices. Some foreign investors have asked whether “China is investable.” In recent weeks, Chinese authorities have announced a series of small monetary, fiscal and regulatory measures to boost the economy and markets. Until now, these measures have been correctly perceived as piecemeal and lacking conviction. However, many still believe that they will eventually accumulate to a shocking critical mass. However, this view raises problems. China faces not only growth challenges but also significant financial problems, including pockets of high debt that could easily transform into systemic risks. This limits the reach of outdated stimuli. Heightened sensitivity surrounding the distressed housing sector, in particular, is making households more cautious in spending, further reducing an engine of growth.