MOS Translation Group – Four Seasons

The recent macroeconomic data shows that the economic slowdown in Communist China is much worse than expected and is not only caused by the covid-19 lockdown, the INFOWARS website reported on May 9.

The extent of the deterioration of the Chinese economy is evident in recent leading indicators. In March 2022, the Caixin China General Manufacturing Purchasing Managers’ Index (PMI) slipped to a 25-month low of 48.1, signaling economic contraction. The Caixin Services PMI plunged to 42.0 in March from 50.2 in February, falling below the level that distinguishes growth from contraction. The figure showed the sharpest decline in economic activity since February 2020.

Its economic problems are deeper and more structural in nature. The Communist country is experiencing a severe economic slowdown caused by the bursting of a huge real estate bubble and a crackdown on the private sector, which has led to cuts in investment growth.

The collapse of the real estate bubble is the biggest problem. The real estate sector accounts for about 29% of the GDP of the Communist country. It is unlikely that the Chinese Communist government will be able to offset the impact of such a large portion of the economy with other high-growth sectors, and the effects of a real estate collapse will last for years.

In addition to the real estate dilemma, the government’s crackdown on the private sector has contributed to making it more difficult to drive growth in other sectors and businesses. Fears of continued political interference lead to a massive slowdown in FDI growth.

In addition, the high level of debt in the country is also a problem. According to the Institute of International Finance, its total debt exceeds 300% of GDP. The European Central Bank (ECB) notes that the entire private sector debt-to-GDP ratio of Communist China is now over 250%, with the corporate debt component being the highest in the world.

As a result, the central bank’s decision to cut bank reserves did not prevent a significant drop in credit growth. The drastic viral “dynamic Covid-zero” policy affects supply chains and economic activity. But the structural problems of increasing monetary and sectoral interventions and a heavily indebted economy could be a drag on real growth and employment for a long time.

Edited and posted by: Kayla J.
Reference Link:

For more information, please follow us at:
New York MOS Himalaya |GTV
New York MOS Himalaya |MOS TALK
New York MOS Himalaya | GETTR
New York MOS Himalaya |YouTube
Free to Join New York MOS Himalaya | Discord