Chinese economy could face tremors, alert economists


Beijing Dated 28th June (News Agency)Economists and research groups have purported that even though the Chinese ruling party claims the Chinese economy as being ‘stable’, but in reality the experts predict  that the economy is about to face turmoil. The Brexit incident is being viewed as a backdrop that has led to record the drop of the Chinese currency, the ‘Yuan’. The 2016 first quarter results show that the Chinese economy has registered a dip in growth rate by 6.7%, which is the lowest since 2009.


Last week China’s central bank had raised an alert that recession is haunting the Chinese economy. Immediately in the preceding week, a report forewarning China’s declining economy was published. This report alleged that in the coming days the Chinese economy would be facing many such turmoil. As a result of which the Chinese economy may experience a slowdown in their growth rate. These reports include studies from China’s ‘Academy of Social Sciences’ (CASS) and the ‘Renmin’ university.

A report published by CASS has raised concerns over the current situation in China. This study interprets that by this yearend China’s growth rate would come down by 6.8%, whereas the newer studies suggested that the growth rate would slow down even further. Some other recent studies, forecast that by the end of the second quarter of this year, China’s growth rate would be going down further. The Chinese government should thus come forward with strategies, as well as provide support to overcome these situations, state the reports published by CASS. 

china-world-markets-res-0316-globaleconomy_thinkadvisorThe CASS report added that even the cash flow and investments in the country have come down. All these information is beheld with seriousness as CASS is the official institute of China that carries out economic surveys for the country. Thus the concern raised in this report surely indicates that the economy of China is currently under threat.

As a result the following corrective measures are being suggested in the report. In order to balance the economy reconstructive measures are to be taken, financial strata needs to be reconsidered. Debt limit need to be reduced, organisations not reporting profits should be closed down.

Reports published by the ‘Renmin’ university also suggest that by the year end, the growth rate would slash down by 6.6%. Economist Mr. Leu Uhanchan of the Renmin University has said that international instability, internal reconstruction of the system and increased financial risk, would lead to the trail down of the Chinese economy. Mr. Uhanchan has alerted that by end of 2016 and in 2017, the Chinese economy would touch down to its lowest limits ever. The Renmin University report further shows that the country could face problems like slower spurt in the economy, lesser increments in salaries and reduced exports.

The financial experts of ‘Bank of China’ have suggested that if all the remedies to correct the current financial structure are not taken, then China’s economy will not be sustainable. China’s ‘National Institute of Statistics’ reported that the investment percentage in China has gone down for the last five months i.e. from the months of January to May. As compared to last year, the investments percentage has come down by 3.4%.

Meanwhile, the Brexit results have also impacted the Chinese economy as the Yuan has recorded an all-time low .The Yuan was 6.6375 against a US dollar which is the lowest devaluation since 2010. China’s central bank had to intervene to stop the further down fall of the Yuan against the US dollar.

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