Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

China's Economic Slowdown Could Have Ripple Effect Across World: Report

China's Economic Slowdown Could Have Ripple Effect Across World: Report

Productivity that determines the long-term growth rate has sunken sharply in the case of China, according to an author.
According to China's National Bureau of Statistics (NBS), the annual GDP growth of the country fell to 3 per cent, much below the 5.5 per cent official target in 2022 and its economic slowdown has the potential to generate ripple effects across the world, reported Financial Post.

The concerns and challenges facing China and the global economy were well articulated by Liu He, the vice-premier of the People's Republic of China, while speaking at the World Economic Forum at Davos 2023.

"Over the past five years, we have experienced all kinds of unexpected events, and witnessed profound changes in the world's political and economic landscape. Therefore, the theme of this year's Annual Meeting, 'Cooperation in a Fragmented World', cannot be more relevant," He said.

"The Covid-19 pandemic punctured China's growth saga. China's GDP growth was also slightly lower than forecasts published by the IMF in October 2022. IMF predictions expected a GDP growth rate of around 4.4 percent.USD 18 trillion in 2021 mainly due to a sharp rise of the dollar against RMB. This is the slowest growth of the Chinese economy since the 2.3 per cent registered in GDP in 1974," reported Financial Post.

Observers were already talking about China falling into the middle-income trap and now, evidence has come to light that the country is finding it hard to keep its miracle of sustained higher growth rates anywhere closer to 10 per cent or more recorded during the late 1980s and the whole of 1990's.

Kim Byung-yeon, author and a professor of economics and head of the Institute for Future Strategy at Seoul National University succinctly argued that "the Chinese economy is slipping into the middle-income-country trap."

According to Kim, productivity that determines the long-term growth rate has sunken sharply in the case of China.

The downward trend has deepened since 2014. China's fast growth over the past 15 years stemmed largely from the infrastructure investment to build factories, housing and roads - and less from structural reform and innovation. Extensive growth led by capital and labor input is not sustainable, reported Financial Post.

The sharp decline in the Chinese GDP growth in 2022 was blamed on a host of factors mainly China shutting itself from the outside world due to the 'Zero Covid' policy. The slow pace was blamed mainly on the strictly 'Zero Covid' policy, leading to periodic lockdowns and the ruling Communist Party's crackdown on big industrial firms besides the lingering real estate crisis.

The most disturbing fact that comes out from the NBS data is that China, the so called 'manufacturing hub' of the world recorded a very feeble growth in industrial output at 3.6 per cent year-on-year in 2022 and even feebler at 1.3 per cent in the month of December. Zhu Hong, a senior NBS statistician, highlighted a rebound in COVID outbreaks and lackluster demand in November that curbed industrial production and placed increasing pressure on Chinese businesses.

According to him, the factors that weighed on slow industrial growth included a squeeze in profits both from anti-virus curbs in big manufacturing hubs such as Guangzhou and Zhengzhou, and from the persistent weight of a protracted property crisis and slowing exports, reported Financial Post.

NBS data in November 22 showed that profits fell for 21 of 41 major industrial sectors, with the ferrous metals smelting and pressing industry suffering the steepest decline, at 94.5 per cent. That compares with a 92.7 per cent fall for the first 10 months.

Another reason for the industrial slowdown is that many Chinese companies are also facing western sanctions including those in the US, especially against the Chinese tech companies which allegedly breach data security and steal patents.

FBI Director Christopher Wray said at the World Economic Forum (WEF) that he was 'deeply concerned' about the Chinese government's artificial intelligence program, asserting that it was "not constrained by the rule of law."
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
The Country That Got Too Rich? Public Spending Dominates Norway Election
EU Proposes Phasing Out Russian Oil and Gas by End of 2027 to End Energy Dependence
More Than 150,000 Followers for a Fictional Character: The New Influencers Are AI Creations
EU Prepares for War
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Big Tech Executives Laud Trump at White House Dinner, Unveil Massive U.S. Investments
Tether Expands into Gold Sector with Profit-Driven Diversification
‘Looks Like a Wig’: Online Users Express Concern Over Kate Middleton
Florida’s Vaccine Revolution: DeSantis Declares War on Mandates
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
"The Situation Has Never Been This Bad": The Fall of PepsiCo
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
The Fashion Designer Who Became an Italian Symbol: Giorgio Armani Has Died at 91
Putin Celebrates ‘Unprecedentedly High’ Ties with China as Gazprom Seals Power of Siberia-2 Deal
China Unveils New Weapons in Grand Military Parade as Xi Hosts Putin and Kim
Rapper Cardi B Cleared of Liability in Los Angeles Civil Assault Trial
Google Avoids Break-Up in U.S. Antitrust Case as Stocks Rise
×