Chinese economy in Distress, it’s model in ‘broken’

INTRODUCTION:

Chinese Economy in Distress: Chinese Economy in trouble and its business model is “broken” In a significant Sunday article.

The Wall Street Journal reported that experts now believe China is entering a period of significantly slower growth, which is being threatened by adverse demographics and a growing rift with the US and its allies.

The second-largest China’s economy in the world, is currently in serious danger. 40-year successful growth model is “broken.”

According to a renowned American financial newspaper. Also noted that symptoms of problems go beyond China’s gloomy Economic data to faraway areas.

Chinese Economy in Distress- Sunday article

The experts now believe China is entering a period of significantly slower growth, threatened by adverse demographics and a growing rift with the US and its allies.

It noted that this might not simply be a brief moment of economic stagnation but also the end of a protracted era. The financial daily declared that the (economic) model was no longer valid.

Columbia University – history professor

Adam Tooze, a history professor at Columbia University specializes in economic crises reported in the Wall Street Journal as saying, We’re witnessing a gearshift in what has been the most dramatic trajectory in economic history.

The research claims that as of 2022, China’s overall debt—which includes debt held by various levels of government and state-owned enterprises—rose to nearly 300 percent of its GDP, surpassing US levels and increasing from less than 200 percent in 2012.

Economic Paradigm

According figures from the Bank for International Settlements. Senior leaders in Beijing have acknowledged that the economic paradigm of previous decades has hit its limits, the newspaper reported.

Last year, Chinese President Xi Jinping lashed aim at authorities for relying on borrowing for building to boost economic activities in a harsh speech to a new generation of party leaders, it continued.

Xi stated, “Some people think that investing in projects and increasing investments is what development is all about. But you can’t walk the old path in new shoes.” According to financial daily, little has done by Xi and his team to depart from the nation’s traditional growth paradigm.

China’s gross domestic product

The first half (H1) of 2023 saw growth in China’s gross domestic product of 5.5% year over year. According to data released in June by the National Bureau of Statistics (NBS). According to the NBS data, China’s GDP hit 59.3 trillion yuan (or 8.3 trillion US dollars) in the first half. China’s state media reported that the country’s GDP increased 6.3% year over year in the second quarter.

In an effort to boost economic growth in the world’s second-largest economy after the United States. China cut 1year loan prime rate on Monday for 2nd time this year by 10 basis points, 3.55% to 3.45%. However, it left the five-year rate unchanged at 4.20 percent.

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