Beijing: – Analysts claim that a series of shocks to China’s economy will hit the post-Corona recovery of the global economy once again. The Chinese government released the economic data for July. It shows a slowdown in industrial production, retail sales, e-commerce and investment sectors. Asian stock markets have plummeted in the wake of Chinese data, and crude oil prices have also fallen. Last week, JP Morgan, an international financial institution, predicted that China’s growth rate would slide to 2% in the new quarter.
Last year, many of the leading economies declined when the Corona outbreak intensified. The economies of many countries, including the United States and European countries, reported negative growth rates. At the same time, China reported that its economy had grown by more than two per cent. Therefore, it was predicted that the Chinese economy would record a reasonable growth rate this year. But with heavy rains in Henan province and a new delta variant epidemic, China’s economic momentum seems to be slowing down once again.
In the first phase of the second quarter, there were signs of a decline in the Chinese economy. In April, China’s industrial output, retail sales and corporate profits fell sharply. At the same time, it was revealed that the non-repayment of loans by Chinese companies has increased. According to Bloomberg, Chinese companies have not repaid a whopping $18 billion, in debt, in the first four months. The impact on the Chinese economy has continued in July, according to July figures.
Retail sales in July fell by four per cent to eight-and-a-half per cent. Industrial production has declined by one per cent since June. Investment has also reduced by one per cent, compared to last year. The e-commerce sector has also been hit hard, with its growth rate falling below five per cent. For the past five years, the rate has averaged more than 20%. China‘s National Bureau of Statistics (NBS) has cited growing uncertainty in the external sector, along with floods and corona, as the reasons for the decline. At the same time, it has warned that the economy is expected to remain volatile and unbalanced.
Bruce Pang, an economist from Hongkong, claimed that if the Chinese economy continues to be jolted because of the new Coronavirus epidemic, it will also hurt the pace of the global economy. There will be problems in the global supply chain and demand for products will fall. Raymond Young, an economist at ANZ Banking Group, said the July figures were a sign of a sharp decline and that the Chinese economy could slow down even in August. The Chinese regime’s ongoing crackdown on private companies has also been indicated to be fatal to the economy. Analysts have warned that the move has created a climate of fear among investors and has shaken the market.
The repercussions of the shock to China‘s economy are beginning to spill over into the international arena. Asian stock markets have fallen along with the crude oil prices.