China's financial recession will be dangerous for US economy – US Treasury Secretary warns

Las Vegas: ‘The US economy is in very good shape. However, China’s financial recession may threaten the US economy. The downturn in China’s economy will majorly impact neighbouring Asian countries. Besides, the US can’t avoid this crisis either,’ US Treasury Secretary Janet Yellen warned. Just a few days ago, US President Joe Biden claimed that the situation in China, the world’s second-largest economy, has become like a ticking time bomb due to the crisis it is facing. This time bomb can explode anytime, indicated US President Biden. Hours later, the White House tried to handle the situation by correcting Biden’s statement. In such a situation, the US Treasury Secretary has declared China’s economic slowdown may threaten the United States.

Moreover, China’s economy is claimed to be harmed by ‘deflation’. In July, a big decline in China’s import and export was announced in just a few days. China’s exports have decreased by 14 per cent and imports by more than 12 per cent. Meanwhile, the index of China’s manufacturing sector has also slipped, and demand and sales have also declined. After this, the top company in the Chinese real estate sector recently announced an economic loss, indicating the scope of the crisis in the Chinese economy. China’s banks and financial institutions have gone bankrupt due to the real estate crisis, directly impacting China’s economy.

In such a situation, the US President called the Chinese economy a ‘time bomb’. Unemployment in China has reached a record level, and Biden claimed that its economic development is also slowing down. In such a situation, Biden also refreshed the memory of the number of retired employees in China being more than the number of active employees. The unemployment rate in China’s urban areas was 5.2 per cent in June, while it increased to 5.3 per cent in July. As soon as this came to the fore, China claimed that a lot of unemployment-related information had been lost, and the data on the amount of unemployment would not be released until further information was received.

Meanwhile, unemployment in China is being claimed to be uncontrollable. Inflation is increasing, and controlling it is challenging for the Chinese Communist government. President Xi Jinping’s economic policy has failed, and the cycle of economic recession is gaining momentum in China. Financial experts and analysts expressed fear that the damage to the Chinese economy may turn into a recession. Against this background, the US Treasury Secretary has given an important warning that the US economy’s crisis depends on China’s economic slowdown.